Adnan Had an Adjusted Basis of $11,000 for His Interest

question 95

Essay

Adnan had an adjusted basis of $11,000 for his interest in the Adnan and Donnell Partnership on December 31. On this date, Adnan received from the partnership, in complete liquidation of his interest, $10,000 cash and land with a $2,000 basis to the partnership and a $3,000 FMV. What is Adnan's basis for the land distributed to him?

Recognize the rights and obligations of general and limited partners within a partnership.

Comprehend the liability implications for partners and the partnership when third parties are involved.

Grasp the conditions under which a partnership may be dissolved or continue its existence.

Identify the statutory requirements for the dissolution, winding down, and termination phases of a partnership.

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Definitions:

Foreseen Users

Individuals who are reasonably anticipated to use a product or service, considered by manufacturers and service providers in liability assessments.

Near Privity

A legal doctrine that expands the scope of who can sue for breach of contract to include parties with a close enough relationship to the transaction, though not directly involved.

Negligent

The failure to take reasonable care to avoid causing injury or loss to another person, resulting in legal liability for the resulting damages.

Reasonably Foreseeable

A legal standard referring to events or consequences that a person should anticipate as likely to happen under certain circumstances.