Nonliquidating_Distributions_solutions

Nonliquidating_Distributions_solutions - Solution:...

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Solution: Nonliquidating Distributions Part 1. Partner (P) has a basis in his partnership interest of $20,000. Determine the tax consequences (gain, basis, etc) for each of the following independent distributions. (a) He receives a proportionate non-liquidating distribution of $25,000 in cash. Partner P: $5,000 capital gain Basis in partnership interest = $0 Partnership: None (b) He receives a proportionate non-liquidating distribution of land with a fair value of $25,000 and a basis to the partnership of $15,000. Partner P: No gain/loss Basis in land = $15,000 Basis in partnership interest = $5,000. Partnership: None (c) He receives a proportionate non-liquidating distribution of land with a fair value of $25,000 and a basis to the partnership of $22,000. Partner P: No gain/loss Basis in land = $20,000 Basis in partnership interest = $0 Partnership: None
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Part 2. Partner A has a basis in his partnership interest of $50,000. Two years ago Partner A contributed property (land) with a basis of $23,000 and a fair value of $35,000 to the partnership. Determine the tax
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Nonliquidating_Distributions_solutions - Solution:...

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