What is Katrina basis in the distributed assets

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Reference no: EM132750838

Problem - Liquidating Distributions - Katrina is a one-third partner in the KYR partnership (calendar year-end). Katrina decides she wants to exit the partnership and receives a proportionate distribution to liquidate her partnership interest on January 1. The partnership has no liabilities and holds the following assets as of January 1:

 

Basis

FMV

Cash

$180,000

$180,000

Accounts receivable

-0-

240,000

Stock investment

75,000

120,000

Land

300,000

360,000

Totals

$555,000

$900,000

Assuming Katrina receives one-third of each of the partnership assets and she has a basis in her partnership interest ("outside basis") of $250,000, then please answer the following questions.

a. What is the amount and character of any recognized gain or loss to Katrina?

b. What is Katrina's basis in the distributed assets?

c. What if, instead of receiving one third of the assets, Katrina sells her partnership interest in KYR to David for $340,000 instead of receiving this distribution of property?

Reference no: EM132750838

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