Randolph is a 30% partner in the RD Partnership.On January 1,RD distributes $26,000 cash to Randolph in complete liquidation of his interest.RD has only capital assets and no liabilities at the date of the distribution.Randolph's basis in RD is $37,000.What is the amount and character of Randolph's gain or loss on the distribution?

Question

Quizplus · Accepted Answer

Randolph's basis in the partnership is $37,000, and he receives $26,000 in liquidation, resulting in an $11,000 loss. Since the partnership only has capital assets, the loss is a capital loss.

Randolph Is a 30% Partner in the RD Partnership