Question

Coy and Matt are equal partners in the Matcoy Partnership. Each partner has a basis in...

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?

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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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