Tenika has a $10,000 basis in her interest in the TF Partnership and no remaining precontribution gain immediately before receiving a current distribution that consisted of $4,000 in money, plastic tubes held in inventory with a $3,000 basis to the partnership and an FMV of $3,375, and drip irrigation pipe held as inventory with a $6,000 basis to the partnership and an FMV of $5,000. What is the basis in Tenika's hands of the distributed property?
A)$10,000
B)$6,000
C)$9,000
D)$10,125

Question

Quizplus · Accepted Answer

The basis of the distributed property is the lesser of the partnership's basis in the property or the partner's basis in the partnership interest reduced by any money received. Tenika's basis is reduced by the $4,000 cash received, leaving $6,000 for the basis of the distributed property.

Tenika Has a $10,000 Basis in Her Interest in the TF