None of the distribution is for partnership goodwill

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Reference no: EM131212269

Beth has an outside basis of $100,000 in the BTDE Partnership as of December 31 of the current year. On that date the partnership liquidates and distributes to Beth a proportionate distribution of $50,000 cash and inventory with an inside basis to the partnership of $10,000 and a FMV of $16,000. In addition, Beth receives an antique desk (not inventory) which has an inside basis of $0 and a FMV of $5,000. None of the distribution is for partnership goodwill. How much gain or loss will Beth recognize on the distribution, and what basis will she take in the desk?

a. $40,000 loss; $0 basis

b. $35,000 loss; $5,000 basis

c. $0 gain or loss; $5,000 basis

d. $0 gain or loss; $40,000 basis

e. None of the above

Reference no: EM131212269

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