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 current (nonliquidating) distribution of the following assets.

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 current (nonliquidating) distribution of the following assets.
  
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 current (nonliquidating) distribution of the following assets.
  
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