Question

Coy and Matt are equal partners in the Matcoy Partnership. Each partner has a basis in his partnership interest of $40,000 at the end of the current year, prior to any distribution. On December 31 they each receive an operating distribution. Coy receives $17,200 cash. Matt receives $5,040 cash and a parcel of land with a $12,160 fair market value and a $6,400 basis to the partnership. Matcoy has no debt or hot assets.

**b.** What is Coy’s ending basis in his
partnership interest?

**d.** What is Matt’s basis in the distributed
property?

**e.** What is Matt’s ending basis in his
partnership interest?

Answer #1

B.

Coy reallocates his basis in metcoy to the cash in an amount equal to the distribution is $17200.

His remaining basis in matcoy is $22800 (40,000 - 17,200)

D.

Matcoy takes a carryover basis in the distributed property. The cache has a basis equal to $5040 and land has a basis equal to $6400.

E.

Basis before Distribution. = $40,000

(-) amount allocated to cash. = ($5040)

(-) amount allocated to land. = ($6400)

Basis in partnership interest =. $28,560

Therefore,his remaining basis in matcoy is $28560

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