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Gain or loss and basis in the land and inventory

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Reference no: EM13142937

William's basis in the WAM Partnership interest was $100,000 just before he received a proportionate liquidating distribution consisting of investment land (basis of $30,000, fair market value $40,000), and inventory (basis of $30,000, fair market value $70,000). After the distribution, William's recognized gain or loss and his basis in the land and inventory are:

a.$40,000 loss; $30,000 (land); $30,000 (inventory).

b.$10,000 gain; $40,000 (land); $70,000 (inventory).

c.$0 gain or loss; $30,000 (land); $70,000 (inventory).

d.$0 gain or loss; $70,000 (land); $30,000 (inventory).

e.None of the above.

Reference no: EM13142937

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