Question

benny is a partner in the ben partnership. his outside basis is $250. he receives a...

benny is a partner in the ben partnership. his outside basis is $250. he receives a distribution of land worth $400 which has a basis inside the partnership of $130

a)is the distribution taxable to Benny? if not, why not?

b)what is Benny's outside basis after the distribution?

c)assume this was a non-liquidating distribution. what is Benny's basis in the land?

d)assume this was a liquidating distribution, what is Benny's basis in the land after the distribution?

Homework Answers

Answer #1

a

Distribution is not taxable as distribution is not in excess of basis in partnership. Partner’s outside basis before distribution is $250. Partnership land has $130 basis to partnership. Distribution reduces partner’s outside basis by $130.

b

Outside basis = Basis before distribution – basis in land = $250 - $130 = $120

c

In non-liquidating distribution basis in land received is equal to basis in it for partnership before distribution. Thus, basis in land is $130 to partner.

d

In liquidating distribution no gain or loss is recognized. Basis in land is equal to partner’s outside basis in partnership before distribution.

It makes basis in land at $250 to partner.

Please rate.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Benny is a partner in the BEN partnership.His outside basis is $250. He receives a distribution...
Benny is a partner in the BEN partnership.His outside basis is $250. He receives a distribution of land worth $400 which has a basis inside the partnership of $130. a)Is the distribution taxable to Benny?If not, why not? b)What is Benny’s outside basis after the distribution? c)Assume this was a non-liquidating distribution.What is Benny’s basis in the land? d)Assume this was a liquidating distribution, what is Benny’s basis in the land after the distribution?
Tom is a partner in TXY partnership. His adjusted basis in the partnership is $30,000. During...
Tom is a partner in TXY partnership. His adjusted basis in the partnership is $30,000. During the year, he receives the following distributions:                                                             AB                              FMV Cash                                                    $25,000                       $25,000 Property                                              $25,000                       $50,000. These are non-liquidating, proportionate, pro-rata distributions. a. What gain, if any, must Tom recognize on these distributions? b. What is Tom’s basis in the property?
Partner Z of the XYZ partnership receives a liquidating distribution of the following: Basis                           
Partner Z of the XYZ partnership receives a liquidating distribution of the following: Basis                                  FMV Cash $40,000                       $40,000 Inventory $30,000                       $45,000 Unrealized receiv. $50,000                       $45,000 1. Z’s basis in her partnership interest was $95,000. What is her gain or loss and the bases of the assets distributed to her? 2. Assume Z’s basis in her partnership interest was $130,000. What is her gain or loss and the bases of the assets distributed to her? The capital percentages are already factored...
Partner N of the LMN partnership receives a liquidating distribution of the following: Basis                           
Partner N of the LMN partnership receives a liquidating distribution of the following: Basis                            FMV Cash   $50,000                       $50,000 Inventory                    $35,000                       $45,000 Unrealized Receiv.    $75,000                       $53,000 Land    $30,000                       $45,000 N’s basis in her partnership interest was $275,000. What is her gain or loss and the bases of the assets distributed to her?
Harvey Harrison has a basis of $30,000 for his partnership interest. He receives as a current...
Harvey Harrison has a basis of $30,000 for his partnership interest. He receives as a current distribution the following as his pro rata share of the partnership assets: Basis FMV Cash $5,000 $5,000 Accounts Receivables 0 12,000 Land held for investment 10,000 13,000 Total $15,000 $30,000 (a.) What is Harvey's gain of loss on the distribution? (b.) What is his basis for the accounts receivable? (c.) What is his basis for the land? (d.) What is his basis for his...
A is a partner in the ABC cash method partnership, has an outside basis of $10,000....
A is a partner in the ABC cash method partnership, has an outside basis of $10,000. In a pro rata operating distribution to the partners, A receives a parcel of land held as inventory by the partnership with a basis of $2,000 and a value of $3,000 and zero basis accounts receivable with a value of $3,000. Both properties become capital assets in her hands. Six years later, she collects the receivables and sells the parcel for $3,000. (a) What...
1. Lucy and Benny formed Beard Partnership in 2006. Lucy’s ownership (P&L %) is 65% and...
1. Lucy and Benny formed Beard Partnership in 2006. Lucy’s ownership (P&L %) is 65% and Benny’s ownership (P&L %) is 35%. Lucy contributed cash of $90,000 and equipment with FMV of $325,000 and basis of $250,000. Benny contributed land with FMV of $215,000 and adjusted basis of $160,000. The land was used by Benny in his sole proprietorship prior to its contribution to the partnership. Beard Partnership sells the land in 2019 for $2,000,000.(6 Points) a. What is Lucy’s...
4. Assume a partnership makes a distribution of land used in their business to a 70%...
4. Assume a partnership makes a distribution of land used in their business to a 70% owner. The partnership purchased the land for $480,000. At the time of the distribution, the land has a FMV of $600,000. The partner’s outside basis is $550,000. a. What is the tax result to the partnership and the partner on this distribution if it were a non liquidating distribution? (2 Points) b. What is the tax result to the partnership and the partner on...
What is the tax treatment to a partner who receives a liquidating distribution assuming the partnership...
What is the tax treatment to a partner who receives a liquidating distribution assuming the partnership has made a Section 754 election. The distribution was cash of $10,000 and capital assets of $30,000. The partner's basis before the distribution was $50,000. What is the gain or loss for the partner, the cash basis after the distribution, capital assets basis, and Section 734 Adjustment?
Problem 11-24 (LO. 2) When Teri's outside basis in the TMF Partnership is $80,000, the partnership...
Problem 11-24 (LO. 2) When Teri's outside basis in the TMF Partnership is $80,000, the partnership distributes to her $30,000 cash, an account receivable (fair market value of $60,000, inside basis to the partnership of $0), and a parcel of land (fair market value of $60,000, inside basis to the partnership of $80,000). Teri remains a partner in the partnership, and the distribution is proportionate to the partners. If an amount is zero, enter "0". c. How much is Teri's...