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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## This note was uploaded on 09/09/2011 for the course TAX 5015 taught by Professor Kelliher,c during the Spring '08 term at University of Central Florida.

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Nonliquidating_Distributions_solutions - Solution...

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