Sabrina has a $12,000 basis in her S&B partnership interest.Sabrina receives a current cash distribution of $10,000 and equipment with a $5,000 basis (FMV $6,000).What is Sabrina's basis in the equipment received?

Question

Quizplus · Accepted Answer

Sabrina's basis in the partnership interest is reduced first by the cash distribution, leaving $2,000 ($12,000 - $10,000). This remaining basis is then allocated to the basis of the equipment received.

Sabrina Has a $12,000 Basis in Her S&B Partnership Interest