Daniela is a 25percent partner in the JRD Partnership. On January 1, JRD makes a proportionate distribution of $23,000 cash, inventory with a $17,600 fair value (inside basis $8,800), and accounts receivable with a fair value of $8,800 (inside basis of $13,200)to Daniela. JRD has no liabilities at the date of the distribution. Daniela's basis in her JRD Partnership interest is $26,400. What is Daniela's basis in the distributed inventory and accounts receivable?
A)$1,700 inventory, $1,700 accounts receivable.
B)$8,800 inventory, $13,200 accounts receivable.
C)$0 inventory, $4,400 accounts receivable.
D)$17,600 inventory, $8,800 accounts receivable.

Question

Quizplus · Accepted Answer

Daniela's basis in the distributed inventory and accounts receivable is equal to the inside basis of the assets, which is $8,800 for the inventory and $13,200 for the accounts receivable.

Daniela Is a 25percent Partner in the JRD Partnership