Doris Owns a One-Third Capital and Profits Interest in the Calendar-Year

question 29

Essay

Doris owns a one-third capital and profits interest in the calendar-year DB Partnership.Her adjusted basis for her partnership interest on July 1 of the current year is $20,000.On that date, she receives an operating distribution of her share of partnership assets shown below:
$$\begin{array}{l}\quad \quad \text { Partrership's Basis in}\\\begin{array} { c r c c } &\text { Asset } & { \text { Asset's Fair Market Value } } \\\text { Cash}&\$ 81,000 & \$ 81,000 \\\text { Inventory}& 36,000 & 24,000 \\\text { Land} & 120,000 & 135,000\end{array}\end{array}$$ What is the amount and character of Doris's gain or loss on the distribution? What is her basis in the distributed assets?

---

Definitions:

Thoracic Vertebrae

The segment of the vertebral column located in the torso, between the cervical vertebrae and lumbar vertebrae.

Facets

Smooth, flat surfaces that form joints between the vertebrae in the spine, allowing for flexibility and movement.

Transverse Foramina

Small openings in the transverse processes of the cervical vertebrae allowing passage of the vertebral artery.

Transverse Processes

Lateral projections from the vertebrae to which muscles and ligaments attach, and serve as points of articulation for ribs in thoracic vertebrae.