Basis available for other property distributed [(Line 4) - (Line 5)] 12,000 7 Loss may be recognized if dist. includes only cash, Unreal. Rec. etc. [Ln 6] 22 C 8 Basis to partner of other property received (Line 6) 12,000 9 Partner's remaining basis in the partnership interest [Must be zero.] - 23 B The ABC Partnership had the following cash basis balance sheet at December 31, 2009: -- Assets -- Basis FMV Cash $50,000 $50,000 Accounts Receivable - 30,000 Land 40,000 70,000 Totals $90,000 $150,000 Capital Accounts: A 30,000 50,000 B 30,000 50,000 C 30,000 50,000 Totals $90,000 $150,000 A, an equal partner, withdrew from the partnership receiving $50,000 cash on January 1, 2010. A’s outside basis is equal to the balance in the capital account. How much capital gain should A report in his 2006 income tax return as a result of this distribution? Answer: 10,000 Partner is treated as receiving share of all assets including unrealized receivables of $10,000. Partner sold the $10,000 of receivables for cash and recognized ordinary income of $10,000. The distributed unrealized receivables were allocated no basis. Partnership basis is still $30,000 after selling the unrealized receivables for $10,000. Remainder of distribution follows distribution rules: Cash received $40,000, basis $30,000. A partnership interest is a capital asset and generates capital gain or loss (except for 751). 24 C 25 D
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- Spring '08
- Madrid Metro, Metropolitana di Napoli, partner, PARTNERSHIP PARTNER-1