b What is the gain to the partnership on this distribution What is the

B what is the gain to the partnership on this

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b. What is the gain to the partnership on this distribution? What is the character of this gain? c. What is the partnership’s adjusted basis in the inventory and Capital Asset X following the distribution?d. What is the balance sheet of the partnership following the distribution?2. The ABC Partnership has the following balance sheetAssetsTaxFMVCash3636Inventory204204Depreciable equipment (recomputed basis $350)180300Capital Asset Y120270Total 540810CapitalA180270B180270C180270Total 54081010
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The partnership has made no election under § 754. A’s interest is liquidated when the partnership distributes Capital Asset Y to him. Consider each of the following questions first under the current §751(b) Regulations and then under the Proposed Regulations.a. What is A’s taxable gain on the distribution? What is the character of this gain? b. What is the gain to the partnership on this distribution? What is the character of this gain? C. What is the partnership’s adjusted basis in the inventory and the equipment following the distribution? d. What is the balance sheet of the partnership following the distribution?3. Assume that the ABC Partnership in 2.above liquidates A’s interest by distributing to him $32 cash, $108 of inventory, and a $130 interest in Capital Asset Y. Does § 751(b) apply to this distribution under either the current §751(b) Regulations or the Proposed Regulations? Should it?
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  • Spring '14
  • RobertWootton
  • basis, partner

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