Nadine Fimple is a one-half partner in the NL Partnership with equal inside and outside bases. On January 1, NL distributes accounts receivable with a fair value of $100,000 to Nadine as an operating distribution. NL's balance sheet as of January 1 is as follows:
$$\begin{array} { | l | r | r | }
\hline & \text { Basis } & \text { FMV } \
\hline \text { Cash } & \$ 100,000 & \$ 100,000 \
\hline \text { Account receivable } & - 0 & 100,000 \
\hline \text { Total } & \$ 100,000 & \$ 200,000 \
\hline
\end{array}$$ What is the amount and character of Nadine's recognized gain or loss on the distribution?

Question

Nadine Fimple is a one-half partner in the NL Partnership with equal inside and outside bases. On January 1, NL distributes accounts receivable with a fair value of $100,000 to Nadine as an operating distribution. NL's balance sheet as of January 1 is as follows:
 $$\begin{array} { | l | r | r | } 
\hline & \text { Basis } & \text { FMV } \
\hline \text { Cash } & \$ 100,000 & \$ 100,000 \
\hline \text { Account receivable } & - 0 & 100,000 \
\hline \text { Total } & \$ 100,000 & \$ 200,000 \
\hline
\end{array}$$ What is the amount and character of Nadine's recognized gain or loss on the distribution?

Quizplus · Accepted Answer

The Answer of Nadine Fimple is a one-half partner in the NL Partnership with equal inside and outside bases. On January 1, NL distributes accounts receivable with a fair value of $100,000 to Nadine as an operating distribution. NL's balance sheet as of January 1 is as follows:
 $$\begin{array} { | l | r | r | } 
\hline & \text { Basis } & \text { FMV } \
\hline \text { Cash } & \$ 100,000 & \$ 100,000 \
\hline \text { Account receivable } & - 0 & 100,000 \
\hline \text { Total } & \$ 100,000 & \$ 200,000 \
\hline
\end{array}$$ What is the amount and character of Nadine's recognized gain or loss on the distribution?

Nadine Fimple Is a One-Half Partner in the NL Partnership