Question

Matt’s outside basis in the partnership is $50,000 and Matt receives cash of $20,000 from the partnership upon complete proportionate liquidation. He also receives some inventory, basis $10,000, (FMV of $15,000). Matt loved the receptionist desk used for the business and Matt manages to get the desk as well upon the liquidation. The partnership’s adjusted basis in the desk is $200.

        

a)      How much capital loss, would Matt recognize on her tax return because of the liquidation?

b)      How much basis Matt will have in the inventory and the desk?

Answer 1

solution :
given that
Matt’s outside basis in the partnership is $50,000 and Matt receives cash of $20,000 from the partnership upon complete proportionate liquidation
also given that
He also receives some inventory, basis $10,000, (FMV of $15,000).
mentioned that
Matt loved the receptionist desk used for the business and Matt manages to get the desk as well upon the liquidation.
The partnership’s adjusted basis in the desk is $200
a) How much capital loss, would Matt recognize on her tax return because of the liquidation?
Since Alley's invested capital was $50,000 and she received $20,000 at liquidation. So she'll recognize $30,000 loss in the her tax return.
b) How much basis Matt will have in the inventory and the desk?
The same she had in the Equity of the company. In this case Alleys's basis in inventory is $15,000 which is the fair market value and in desk is $200