1. A cash basis partnership is formed on January 1, 2011 and has a taxable year ending on
December 31. Partner A, a 25% partner using the accrual method of accounting, has a taxable
year ending on June 30. From January 1, 2011 to June 30, 20
The Taxation of Partnerships
Third Homework Assignment
1. P is a 40% partner in partnership PS. Ps basis in its partnership interest is $40. PS is worth
$200. Analyze each of these alternative possible fact patterns:
a. P receives a distribution
I. a. According to Section 752, Cs basis in the partnership is $3302 at the time of sale.
Cs percentage interest in the partnership is 34.8%. (3000-1400)/(1500+1500+3000-1400)
Relief of liability (1400*65.2%)
1. $5= 25%*20. B has 25% of interest in the partnership. Partnership realizes $20 gain and
passes through to A and B. B gets 25% of $20.
2. $8=40%*20. Bs basis of the property was $40, because the mortgage reduced the basis. Bs