# partnership tax law

Anonymous

### Question Description

Partner A received the following in a nonliquidating distribution:

Basis FMV

Cash \$20,000 \$20,000

Inventory Item 1 \$15,000 \$18,000

Inventory Item 2 \$12,000 \$4,000

Capital Asset 1 \$15,000 \$8,000

Capital Asset 2 \$10,000 \$20,000

\$72,000 \$70,000

Assume A’s basis in the partnership before the distribution was \$35,000. What would the bases of the assets be to A?

he ABC partnership has the following balance sheets:

 Basis FMV Land \$30,000 \$60,000 Liabilities \$0 \$0 A \$10,000 \$20,000 B \$10,000 \$20,000 C \$10,000 \$20,000 \$30,000 \$60,000

A sold his (1/3) interest to G for \$20,000, with \$15,000 payable this year and \$5,000 next year. How much and what character of gain will A have to recognize in each of the two years?

Robert__F
School: UCLA

Basis
Cash
Inventory item 1
Inventory item 2
Capital asset 1
Capital asset 2
Total assets

FMV
20000
15000
12000
15000
10000
72000

20000
18000
4000
8000
20000
70000

Calculation of the percentage of A
A partner basis
35000
Partnership basis
72000
% partner A
48.61%
Assets attributable to A according to the computed percentage
Basis
FMV
Gain
Cash
\$ 9,722.22 \$ 9,722.22 \$
Inventory item 1 \$ 7,291.67 \$ 8,750.00 \$ 1,458.33
Inventory item 2 \$ 5,833.33 \$ 1,944.44 \$ (3,888.89)
Capital asset 1
\$ 7,291.67 \$ 3,888.89 \$ (3,402.78)
Capital asset 2
\$ 4,861.11 \$ 9,722.22 \$ 4,861.11
Total assets
\$ 35,000.00 \$ 34,027.78 \$ (972.22)

Land
Liabilities
A
B
C
Total

Basis
FMV
30000
60000
0
0
10000
20000
10000
20000
10000
20000
30000
60000

Calculation of the gain declared by A
In the current year
Cash received from G
15000
-Liability relief
0
-Basis
-10000
Gain current ye...

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Anonymous
Thanks for the help.

Anonymous
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Anonymous
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