Kathy Is a 25percent Partner in the KDP Partnership and Receives

question 38

Multiple Choice

Kathy is a 25percent partner in the KDP Partnership and receives a parcel of land with a fair value of $150,000 (inside basis of $100,000) in complete liquidation of her partnership interest. Kathy's outside basis immediately before the distribution is $200,000. KDP currently has a §754 election in effect and has no hot assets or liabilities. What is KDP's special basis adjustment from the distribution?

• A)$0.
• B)$50,000 positive basis adjustment.
• C)$100,000 positive basis adjustment.
• D)$100,000 negative basis adjustment.

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