Kathy purchases a one-third interest in the KDP Partnership from Paul for $60,000. Just prior to the sale, Paul's outside and inside bases in KDP are $48,000. KDP's balance sheet includes the following: If KDP has a §754 election in place, what is Kathy's special basis adjustment?
A) $0.
B) $36,000.
C) $12,000.
D) None of the choices are correct.

Question

Kathy purchases a one-third interest in the KDP Partnership from Paul for $60,000. Just prior to the sale, Paul's outside and inside bases in KDP are $48,000. KDP's balance sheet includes the following:   If KDP has a §754 election in place, what is Kathy's special basis adjustment?
A) $0. 
B) $36,000. 
C) $12,000. 
D) None of the choices are correct.

Quizplus · Accepted Answer

The Answer of Kathy purchases a one-third interest in the KDP Partnership from Paul for $60,000. Just prior to the sale, Paul's outside and inside bases in KDP are $48,000. KDP's balance sheet includes the following:   If KDP has a §754 election in place, what is Kathy's special basis adjustment?
A) $0. 
B) $36,000. 
C) $12,000. 
D) None of the choices are correct.

Kathy Purchases a One-Third Interest in the KDP Partnership from Paul