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 by the cash distribution first, leaving her with a $2,000 basis. The equipment is then received with a basis equal to the remaining basis in the partnership interest, which is $2,000.

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