PLLCBK_10th_Ch 12_Problems.doc - Practical Guide to...

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Practical Guide to Partnerships and LLCs—Instructor’s Guide Problems Chapter 12 – Partnership Distributions Reading: Paragraphs 1201-1205. 4. If a partner is distributed encumbered property, what is the ordering in time of the following for tax purposes: (1) the assumption of the debt by the distributee partner, (2) the reduction in the distributee partner’s share of the partnership debt, and (3) the distribution of the property?
5. Partner D of the equal DEF partnership has a basis in her partnership interest of $7,000. The partnership distributes property to her with a FMV = $102,000, basis = $90,000, and an associated liability of $72,000. What is her basis in the partnership and the property after the distribution?

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