Question

Harvey Harrison has a basis of $30,000 for his partnership interest. He receives as a current distribution the following as his pro rata share of the partnership assets:

Basis | FMV | |

Cash | $5,000 | $5,000 |

Accounts Receivables | 0 | 12,000 |

Land held for investment | 10,000 | 13,000 |

Total | $15,000 | $30,000 |

(a.) What is Harvey's gain of loss on the distribution?

(b.) What is his basis for the accounts receivable?

(c.) What is his basis for the land?

(d.) What is his basis for his partnership interest?

Answer #1

Answer.

The Basis of Partnership is the money plus adjusted basis of any property contributed by partner.

A) Zero , as Cash did not exceed Harvey's basis for his partnership interest. He didn't recognize any gain on the distribution.

(b.) Zero. The receivables take the same basis for Harvey as they had for the partnership. No change in basis to recognise gain.

(c.) $10,000. The land also takes the same basis for Harvey as it had for the partnership.Profit on and will be recognise when land will be disposed off.

(d.) $15,000. The basis of his partnership interest is the balance remaining after the reduction for the cash and the basis of the other Property Distributed ($ 30000 - $ 5000 -$ 10000= $15000)

Tom is a partner in TXY partnership. His adjusted basis in the
partnership is $30,000. During the year, he receives the following
distributions:
AB
FMV
Cash
$25,000
$25,000
Property
$25,000
$50,000.
These are non-liquidating, proportionate, pro-rata
distributions.
a. What gain, if any, must Tom recognize on these
distributions?
b. What is Tom’s basis in the property?

Gary's basis in his interest in the GAR Partnership is $24,000.
In complete liquidation fo his interest, Gary receives cash of
$4,000 and land having a FMV of $40,000 and an inside basis of
$15,000. a. How much gain or loss, if any, does Gary recognize for
tax purposes b. What is Gary's basis in the land after
distribution?

Kristen and Harrison are equal partners in the KH Partnership.
The partners formed the partnership five years ago by contributing
cash. Prior to any distributions Harrison has a basis in his
partnership interest of $28,500. On December 31, KH makes a
proportionate operating distribution of $41,500 cash to Harrison.
What is the amount and character of Harrison's recognized gain or
loss and what is his remaining basis in KH?
Multiple Choice
$0 gain, $0 basis.
$13,000 capital gain, $0 basis....

A is a partner in the ABC cash method partnership, has an
outside basis of $10,000. In a pro rata operating distribution to
the partners, A receives a parcel of land held as inventory by the
partnership with a basis of $2,000 and a value of $3,000 and zero
basis accounts receivable with a value of $3,000. Both properties
become capital assets in her hands. Six years later, she collects
the receivables and sells the parcel for $3,000.
(a) What...

Partner N of the LMN partnership receives a liquidating
distribution of the following:
Basis FMV
Cash
$50,000 $50,000
Inventory $35,000 $45,000
Unrealized Receiv.
$75,000 $53,000
Land
$30,000 $45,000
N’s basis in her partnership interest was $275,000. What is her
gain or loss and the bases of the assets distributed to her?

Partner Z of the XYZ
partnership receives a liquidating distribution of the
following:
Basis
FMV
Cash
$40,000
$40,000
Inventory
$30,000
$45,000
Unrealized receiv.
$50,000
$45,000
1. Z’s basis in her
partnership interest was $95,000. What is her gain or loss and the
bases of the assets distributed to her?
2. Assume Z’s basis
in her partnership interest was $130,000. What is her gain or loss
and the bases of the assets distributed to her?
The capital
percentages are already factored...

Andrew has a $60,000
basis in his one-third interest in the JAS Partnership when he
sells it to Miguel for $80,000 in cash. Andrew's basis includes his
share of liabilities and his share of income up to the sale date.
On the sale date, the general partnership reports $30,000 of
liabilities and the following assets:
Partnership's
Assets
Basis
FMV
Cash
$ 51,000
$ 51,000
Receivables
-0-
36,000
Land
129,000
183,000
Total:
$180,000
$270,000
Required:
Determine the amount and the...

Andrew has a $60,000 basis in his one-third interest in the JAS
Partnership when he sells it to Miguel for $80,000 in cash.
Andrew's basis includes his share of liabilities and his share of
income up to the sale date. On the sale date, the general
partnership reports $30,000 of liabilities and the following
assets:
Partnership's
Assets Basis FMV
Cash $ 51,000 $
51,000
Receivables -0-
36,000
Land 129,000
183,000
Total: $180,000
$270,000
Required:...

The XYZ partnership had the following balance sheet:
Basis
FMV
Cash
$30,000
$30,000
Accounts Receivable
0
48,000
Land
36,000
93,000
Goodwill
0
15,000
$66,000
$186,000
Capital, X
$22,000
$62,000
Capital, Y
22,000
62,000
Capital, Z
22,000
62,000
$66,000
$186,000
In liquidation of his interest X receives a distribution equal
to 50% of partnership income for each of the first two years after
his retirement. Partnership income was $80,000 in each of those
years. X was a general...

At the beginning of the year, Elsie’s basis in the E&G
Partnership interest is $80,000. She receives a proportionate
current (nonliquidating) distribution from the partnership
consisting of $20,000 of cash, unrealized accounts receivable
(basis of $0, fair market value $40,000), and land (basis of
$20,000, fair market value of $50,000). After the distribution,
Elsie’s bases in the accounts receivable, land, and partnership
interest are:
a. $0; $30,000; and $50,000.
b. $0; $50,000; and $30,000.
c. $40,000; $30,000; and $10,000.
d....

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