liquidating_distributions_sale_retirement_solution

liquidating_distributions_sale_retirement_solution -...

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Solution: Liquidating distributions Part 1: Partnership Liquidation . Ted’s basis for his interest in the Troy Partnership is $24,000. In complete liquidation of his interest, Ted receives cash of $4,000 and real property (not a Sec. 751 asset) having a fair value of $40,000. Troy’s adjusted basis for this real property is $15,000. What are the tax consequences to Ted and Troy (gain, basis, etc…)? Troy P/S: No gain or loss Ted: No gain or loss Basis in real property = $20,000 [$24,000 – $4,000] Part 2: Partnership Liquidation . Ms. A’s interest in Partnership D had an adjusted basis of $40,000. In complete liquidation of D, A received $20,000 cash, inventory items with a basis to D of $10,000 (fair value $15,000), and land used in the partnership more than one year with an adjusted basis to D of $15,000 (fair value $18,000). What are the tax consequences to A and D (gain, basis, etc)? D P/S: No gain or loss Ms. A: No gain/loss Basis in cash = $20,000 Basis in inventory = $10,000 Basis in land = $10,000 [$40,000 – $20,000 – $10,000]. Part 3: Partnership Sale. Steve sells his 20% partnership interest having a $28,000 basis to Nancy for $40,000 cash.
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