Randy Owns a One-Fourth Capital and Profits Interest in the Calendar-Year

question 90

Essay

Randy owns a one-fourth capital and profits interest in the calendar-year RUSR Partnership. His adjusted basis for his partnership interest was $200,000 when he received a proportionate nonliquidating distribution of the following assets:
Partnership's Basis in Asset Asset's Fair Market Value
Cash $120,000 $120,000
Inventory 60,000 90,000
a. Calculate Randy's recognized gain or loss on the distribution, if any. Explain.
b. Calculate Randy's basis in the inventory received.
c. Calculate Randy's basis for his partnership interest after the distribution.

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Definitions:

Product Characteristics

The attributes or features of a product that define its nature, functionality, and usability for the end user.

Network Requirements

Specifications and criteria that need to be met for the infrastructure and operations of a network, such as a telecommunications or logistics network, to function effectively.

Distribution Network

The system of warehouses, transportation options, and distribution centers that helps in moving products from manufacturers to consumers.

Omni-Channel Retailing

A multichannel approach to sales that focuses on providing a seamless customer experience whether the client is shopping online from a mobile device, a laptop, or in a brick-and-mortar store.