Adam and Alyssa are equal partners in the PartiPilo Partnership. The partners fo

Question

Adam and Alyssa are equal partners in the PartiPilo Partnership. The partners formed the partnership three years ago by contributing cash. Prior to any distributions, the partners have the following bases in their partnership interests:

Partner Outside Basis

Adam $ 13,700

Alyssa $ 13,700

On December 31 of the current year, the partnership makes a pro rata operating distribution of:

Partner Distribution Adam Cash $ 21,900

Alyssa Cash $ 8,550

Property $ 13,350 (FMV) ($11,850 basis to partnership)

What is Alyssa’s basis in the distributed assets?

basis in cash ____________

basis in property _____________

Explanation / Answer

Alyssa reduces her basis in partipilo by $ 8,550 for the cash distribution, which leaves her with a basis of $ 8,200.

Alyssa assigns a $ 8,200 basis to the property ( a reduction of 3,650).

{ Here, alyssa cash and property is = $ 8,550 + $ 13,350 = $ 21,000

Now, $ 21900 - $ 13700 = $ 8,200 }

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