Reference no: EM132783587

The ABC Partnership distributes the following property to Alex in a distribution that liquidates Alex's interest in the partnership. Assume that no Sec. 754 election is in effect. Alex's basis in his partnership interest before the distribution is $69,000.

The adjusted bases and FMVs of the distributed property to the partnership before the distribution are as follows:

Assets                        Basis               FMV
Cash                    $ 5,000             $ 5,000
Inv.                     16,000            8,000
Capital Asset 1     20,000             30,000
Capital Asset 2     40,000               35,000
Total                  81,000                88,000

Problem 1: Determine Alex's basis in each distributed asset. Show computations for full credit.