Karli owns a 25% capital and profits interest in the calendar-year KJDV Partnership.Her adjusted basis for her partnership interest on July 1 of the current year is $200,000.On that date,she receives a proportionate nonliquidating distribution of the following assets: Partnership's Basis in Asset Asset's Fair Market Value Cash $120,000 $120,000 Inventory 50,000 60,000 Land (held for investment) 70,000 100,000
a.Calculate Karli's recognized gain or loss on the distribution,if any.
b.Calculate Karli's basis in the inventory received.
c.Calculate Karli's basis in land received.The land is a capital asset.
d.Calculate Karli's basis for her partnership interest after the distribution.

Question

Karli owns a 25% capital and profits interest in the calendar-year KJDV Partnership.Her adjusted basis for her partnership interest on July 1 of the current year is $200,000.On that date,she receives a proportionate nonliquidating distribution of the following assets: Partnership's Basis in Asset Asset's Fair Market Value Cash $120,000 $120,000 Inventory 50,000 60,000 Land (held for investment) 70,000 100,000 ​
a.Calculate Karli's recognized gain or loss on the distribution,if any.
b.Calculate Karli's basis in the inventory received.
c.Calculate Karli's basis in land received.The land is a capital asset.
d.Calculate Karli's basis for her partnership interest after the distribution.

Quizplus · Accepted Answer

The Answer of Karli owns a 25% capital and profits interest in the calendar-year KJDV Partnership.Her adjusted basis for her partnership interest on July 1 of the current year is $200,000.On that date,she receives a proportionate nonliquidating distribution of the following assets: Partnership's Basis in Asset Asset's Fair Market Value Cash $120,000 $120,000 Inventory 50,000 60,000 Land (held for investment) 70,000 100,000 ​
a.Calculate Karli's recognized gain or loss on the distribution,if any.
b.Calculate Karli's basis in the inventory received.
c.Calculate Karli's basis in land received.The land is a capital asset.
d.Calculate Karli's basis for her partnership interest after the distribution.

Karli Owns a 25% Capital and Profits Interest in the Calendar-Year