Question

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 in because this is the liquidating
distribution that Partner Z is receiving (so the amount allocated
has factored this in). The question is what is her gain or loss
where a partner receives solely cash, unrealized receivables and
inventory items (all ordinary income items) in a liquidating
distribution.**

Answer #1

1. There is no gain or loss. The deficit between inside an outside basis is $25,000($120,000-$95,000) . The base of assets distributed to her as follows:

Beginning basis

Cash | $40,000 |

Inventory ($30,000- $20,000($30,000/($30,000+$45,000)) | $22,000 |

Unrealized receivables ($50,000-$5,000- $20,000($45,000/($30,000+$45,000)) | $33,000 |

2. Her loss will ne equals to $10,000. Her outside basis of $130,000 minus the total of cash and basis of the assets distributed, $120,000. Her bases in assets distributed will be the same as I'm the hands of the partnership.

_____×_____

All the best

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?

Partner A received the following in a non-liquidating
distribution:
Basis FMV
Cash
$20,000 $20,000
Inventory Item
1 $15,000 $18,000
Inventory Item
2 $12,000 $4,000
Capital Asset
1 $15,000
$8,000
Capital Asset 2 $10,000 $20,000
$72,000 $70,000
Assume A’s basis in the partnership before the distribution was
$35,000. What would the bases of the assets be to A?

Please explain step by step the liquidating distribution below:
problem Carlos receives a proportionate liquidating distribution
consisting of $8000 cash and inventory with a basis to the
partnership of $5,000 and a FMV of $6000. His basis in his
partnership interest was $15,000 immediately before the
distribution. Carlos assigns a basis of $7,000 to the inventory,
and recognizes no gain or loss. True/False

Simon is a 30 percent partner in the SBD Partnership, a calendar
year-end entity. As of the end of this year, Simon has an outside
basis in his interest in SBD of $188,000, which includes his share
of the $60,000 of partnership liabilities. On December 31, SBD
makes a proportionate distribution of the following assets to
Simon:
Tax Basis
FMV
Cash
$
40,000
$
40,000
Inventory
55,000
65,000
Land
30,000
45,000
Totals
$
125,000
$
150,000
a1. What are the...

David’s basis in the Jimsoo Partnership is $55,000. In a
proportionate liquidating distribution, David receives cash of
$7,400 and two capital assets: (1) land 1 with a fair market value
of $20,800 and a basis to Jimsoo of $16,600, and (2) land 2 with a
fair market value of $10,300 and a basis to Jimsoo of $16,600.
Jimsoo has no liabilities. c1. If the two parcels of land had been
inventory to Jimsoo, what are the tax consequences to David...

The WXYZ partnership has the two assets shown in table before
its liquidating distribution to partner W. If partner W with a
$3,000 basis in her 25% interest receives $10,000 of capital
assets, what basis will W have in the capital assets as a result of
the liquidation?
Assets
Basis Value
Accounts
Receivable
$0
$20,000
capital
assets
12,000 20,000
Total
$12,000 $40,000

Madison is a 35% partner in the Total Partnership, a
calendar-year-end entity. Madison has an outside basis in his
interest in Total Partnership of $198,000, which includes his share
of the $45,000 of partnership liabilities. On December 31, Total
makes a proportionate distribution of the following assets to
Madison:
BASIS
FMV
Cash
$50,000
$50,000
Inventory
$65,000
$75,000
Land
$50,000
$65,000
Totals
$165,000
$180,000
For an operating distribution, outline the tax consequences
(amount and character of recognized gain or loss, basis...

1. In complete liquidation of her interest in
the Buyers Partnership, Sarah received a cash distribution of
$40,000. Her basis in the partnership interest prior to receipt of
the liquidating distribution was $48,000.
a). How much gain or loss must Sarah recognize on
receipt of the liquidating distribution? b).
Assume that Sarah received cash of only $25,000, and property worth
$15,000 in complete liquidation of her interest in
the partnership. How much gain or loss would she recognize? What
would...

Liquidations:
Determine whether the following statements are True or
False:
TRUE FALSE
1. A liquidating cash distribution may reduce the recipient
partner's basis below zero.
2. A liquidating distribution of appreciated inventory reduces the
recipient partner's basis in his partnership interest to below
zero.
3. If a partner...

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?

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 5 minutes ago

asked 5 minutes ago

asked 1 month ago

asked 2 months ago

asked 4 months ago

asked 3 weeks ago

asked 3 weeks ago

asked 3 weeks ago

asked 3 weeks ago

asked 3 weeks ago

asked 4 months ago

asked 2 months ago