What basis will she take in the property received

Reference no: EM132218888

Question: 1. Jonna is a one-fourth partner in Andersen Partners. At the end of the year, her tax basis in her tax basis in her partnership interest was $25,000. At that time, she received a non-liquidating distribution from the partnership of property with a basis of $22,000 and a fair market value of $38,000. The distribution was not a disproportionate distribution.

a) How much gain must Jonna recognize on receipt of the distribution from the partnership?

b) What basis will she take in the property received?

c) How would your answers change if the tax basis of the property had been $38,000 and its fair market value had been $50,000?

2. Rick is a partner in the Ten Hicks Partnership. This year, he received a distribution consisting of two properties. Property 1 was worth $40,000 at the date of the distribution and had a tax basis to the partnership of $28,000. Property 2 was worth $60,000 and had a tax basis of $12,000. Rick's tax basis in his partnership interest was $30,000 prior to the distribution. The partnership did not have any hot assets either before or after the distribution.

a) Will Rick recognize any gain or loss on receipt of the distribution?

b) What will be Rick's tax basis in each of the properties received?

c)What will be his remaining tax basis in his partnership interest?

3. Edna was a one-third partner in OldGrad partners until December 31, when her interest in the partnership was liquidate. Prior to the liquidation, her basis in her partnership interest was $45,000. She received $15,000 cash and property with a tax basis (to the partnership) of $50,000 and a fair market value of $64,000 in complete liquidation of her interest. The distribution was not a disproportionate distribution under Section 751(b).

a) How much gain or loss will Edna recognize upon receipt of the distribution?

b) What basis will she take in the property received from the partnership?

4. Kevin recently decide to leave the Jackson Partnership. His tax basis in his one-fifth interest in the partnership was $50,000. In complete liquidation of that interest, he received cash of $20,000 and property with a tax basis of $18,000 and a fair market value of $60,000. The distribution was not a disproportionate distribution subject to Section 751(b).

a) How much gain or loss will Kevin recognize on receipt of the liquidating distribution?

b) What will be his tax basis in the property received in the distribution?

5. In complete liquidation of her interest in the Buyers Partnership, Sarah received a cash distribution of $40,000. Her basis in the partnership interest prior to receipt of the liquidating distribution was $48,000.

a) How much gain or loss must Sarah recognize on receipt of the liquidating distribution?

b) Assume that Sarah received cash of only $25,000, and property worth $15,000 in complete liquidation of her interest in the partnership. How much gain or loss would she recognize? What would be her basis in the property received?

6. In complete liquidation of his interest in the KD Partnership, Scott received a distribution consisting of $38,000 cash and property valued at $62,000. The partnership's tax basis in the property, which was not inventory or unrealized receivable, was $22,000. Scott's basis in his partnership interest prior to receipt of the liquidating distribution was $35,000. The distribution was not a disproportionate distribution.

a)Will Scott be required to recognize any gain or loss for tax purposes upon receipt of the liquidating distribution?

b)What will be his tax basis in the property received from the partnership?

Reference no: EM132218888

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