14, Ka adjusted basis for her partnership she receives a pro rli owns a 25% capi
ID: 2558420 • Letter: 1
Question
14, Ka adjusted basis for her partnership she receives a pro rli owns a 25% capital and profits interest in the calendar year KJDV Partnership. Her interest on July 1 of the current year is $200,000. On that date, portionate current (nonliquidating) distribution of the following assets. Partnership's Basis in Asset $120,000 Asset's Fair Market Value $120,000 Cash Inventory Land (held for investment) 50,000 60,000 100,000 70,000 a. Calculate Karli's recognized gain or loss on the distribution, if any. b. Calculate Karli's basis in the inventory received c. Calculate Karli's basis in land received. The land is a capital asset. d. Calculate Karli's basis for her partnership interest after the distribution.Explanation / Answer
1. Karli won't recognize any gain or loss on the cash conveyance since her basis of $200000 surpasses the cash dispersion ($120000) subsequently no gain or loss recognized
2. The balanced basis of inventory is $50000.l Now first the karli partnership basis will be decreased with cash appropriation $200000-$120000=$80000 and out of this balanced basis $50000 will be diminished. So now Karli staying balanced basis is $30000 ($80000-$30000)
3. Presently as land is circulated so Karli basis in the land can be most extreme upto her reaming basis of $30000 regardless of the remainder estimation of the land which is $70000. So Karli basis in the land is $30000
4. After the appropriation karli Basis is 0 as she has gotten cash ($1200000), inventory ($50000) and $30000 of land in this manner making her basis 0
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