Question

Adam and Alyssa are equal partners in the PartiPilo Partnership. The partners formed the partnership three years ago by contributing cash. Prior to any distributions, the partners have the following bases in their partnership interests: (Leave no answer blank. Enter zero if applicable.)

Partner	Outside Basis
Adam	$	14,300
Alyssa		14,300

On December 31 of the current year, the partnership makes a pro rata operating distribution of:

Partner	Distribution
Adam	Cash	$	22,600
Alyssa	Cash	$	11,200
	Property	$	11,400	(FMV) ($8,200 basis to partnership)

b. What is Adam’s remaining basis in his partnership interest?

d. What is Alyssa’s basis in the distributed assets?

e. What is Alyssa’s remaining basis in her partnership interest?

Answer 1

b.)	Adam's remaining basis in his partnership interest will be $0 as cash received of $22,600 will reduces his basis of $ 14,300 to $0.

d.)		Amount $
	Alyssa outside basis	14,300
	Less: Cash received	11,200
	Basis for distributed assets	3,100

Alyssa basis in the distributed assets will be $ 3,100 .

e.)	Alyssa’s remaining basis in her partnership interest will be $ 0 as his all basis of $14,300 has been adjusted first by cash received of $ 11,200 & balance of $ 3,100 becomes the basis for distributed asset, leaving Nil basis in partnership interest.