Jackie owns a 40% interest in the capital and profits of the JAJ Partnership.Immediately before she receives a proportionate nonliquidating distribution from JAJ,the basis of her partnership interest is $40,000.The distribution consists of $20,000 in cash and land with a fair market value of $30,000.JAJ's adjusted basis in the land immediately before the distribution is $25,000.As a result of the distribution,Jackie recognizes no gain or loss and her basis in the land is $20,000.

Question

Quizplus · Accepted Answer

Jackie's basis in the land is $20,000 because the distribution is proportionate and nonliquidating, so she recognizes no gain or loss.

Jackie Owns a 40% Interest in the Capital and Profits