Tatia's basis in her TRQ partnership interest is $33,000. Tatia receives a distribution of $22,000 cash from TRQ in complete liquidation of her interest. The three partners in TRQ share profits, losses, and capital equally. TRQ has the following balance sheet:
$$\begin{array} { | l | r | r | }
\hline \text { Assets: } & \text { Basis } & \text { FMV } \
\hline \text { Cash } & \$ 22,000 & \$ 22,000 \
\hline \text { Stock (imvestment) } & 11,000 & 22,000 \
\hline \text { Land } & \underline { 66,000 } & \underline { 22,000 } \
\hline \text { Total } & \$ 99,000 & \$ 66,000 \
\hline
\end{array}$$ a. What is the amount and character of Tatia's recognized gain or loss? What is the effect on the partnership assets?
b. If TRQ has a §754 election in place, what is the amount of the special basis adjustment?

Question

Tatia's basis in her TRQ partnership interest is $33,000. Tatia receives a distribution of $22,000 cash from TRQ in complete liquidation of her interest. The three partners in TRQ share profits, losses, and capital equally. TRQ has the following balance sheet:
 $$\begin{array} { | l | r | r | } 
\hline \text { Assets: } & \text { Basis } & \text { FMV } \
\hline \text { Cash } & \$ 22,000 & \$ 22,000 \
\hline \text { Stock (imvestment) } & 11,000 & 22,000 \
\hline \text { Land } & \underline { 66,000 } & \underline { 22,000 } \
\hline \text { Total } & \$ 99,000 & \$ 66,000 \
\hline
\end{array}$$ a. What is the amount and character of Tatia's recognized gain or loss? What is the effect on the partnership assets?
b. If TRQ has a §754 election in place, what is the amount of the special basis adjustment?

Quizplus · Accepted Answer

The Answer of Tatia's basis in her TRQ partnership interest is $33,000. Tatia receives a distribution of $22,000 cash from TRQ in complete liquidation of her interest. The three partners in TRQ share profits, losses, and capital equally. TRQ has the following balance sheet:
 $$\begin{array} { | l | r | r | } 
\hline \text { Assets: } & \text { Basis } & \text { FMV } \
\hline \text { Cash } & \$ 22,000 & \$ 22,000 \
\hline \text { Stock (imvestment) } & 11,000 & 22,000 \
\hline \text { Land } & \underline { 66,000 } & \underline { 22,000 } \
\hline \text { Total } & \$ 99,000 & \$ 66,000 \
\hline
\end{array}$$ a. What is the amount and character of Tatia's recognized gain or loss? What is the effect on the partnership assets?
b. If TRQ has a §754 election in place, what is the amount of the special basis adjustment?

Tatia's Basis in Her TRQ Partnership Interest Is $33,000 A What Is the Amount and Character of Tatia's Recognized