Before receiving a liquidating distribution, Kathy's basis in her interest in the KLM Partnership is $30,000.The distribution consists of $5,000 in money, inventory having a $1,000 basis to the partnership and a $2,000 FMV, and two parcels of undeveloped land (not held as inventory)having basis of $3,000 and $9,000 to the partnership with FMVs of $5,000 and $12,000, respectively.What is Kathy's basis in each parcel of land?

Question

Quizplus · Accepted Answer

C) Basis allocated to parcels = $30,000 - $5,000 - $1,000 = $24,000
 11ea83d0_ede7_34a8_908c_c5ff862219e2_TB5378_00 *$5,000 ÷ ($5,000 + $12,000) × 7,000 = 2,059
**$12,000 ÷ ($5,000 + $12,000) × 7,000 = 4,941

Before Receiving a Liquidating Distribution, Kathy's Basis in Her Interest