What is juan initial basis in the partnership interest

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Question - Allison, Keesha, and Steven each owns an equal interest in KAS Partnership, a calendar-year-end, cash-method entity. On January 1 of the current year, Steven's basis in his partnership interest is $31,000. During January and February, the partnership generates $35,280 of ordinary income and $5,748 of tax-exempt income. On March 1, Steven sells his partnership interest to Juan for a cash payment of $53,800. The partnership has the following assets and no liabilities at the sale date:

 

Tax Basis

FMV

Cash

$38,000

$38,000

Land held for investment

38,000

76,000

Totals

$76,000

$114,000

a. Assuming KAS's operating agreement provides for an interim closing of the books when partners' interests change during the year, what is Steven's basis in his partnership interest on March 1 just prior to the sale?

b. What is Juan's initial basis in the partnership interest?

c. What is the partnership's basis in the assets following the sale?

Reference no: EM133118195

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