Mack Has a Basis in a Partnership Interest of $200,000

question 157

Multiple Choice

Mack has a basis in a partnership interest of $200,000, including his share of partnership debt. At the end of the current year, the partnership distributed to Mack, in a proportionate current (nonliquidating) distribution, cash of $20,000, inventory (basis to the partnership of $30,000 and fair market value of $40,000) , and land (basis to the partnership of $40,000 and fair market value of $42,000) . In addition, Mack's share of partnership debt decreased by
$12,000 during the year. What basis does Mack take in the inventory and land and in the partnership interest
(including debt share) following the distribution?

• A) $30,000 basis in inventory; $40,000 basis in land, $98,000 basis in partnership.
• B) $30,000 basis in inventory; $42,000 basis in land, $110,000 basis in partnership.
• C) $40,000 basis in inventory; $40,000 basis in land, $86,000 basis in partnership.
• D) $40,000 basis in inventory; $42,000 basis in land, $98,000 basis in partnership.
• E) $40,000 basis in inventory; $42,000 basis in land, $110,000 basis in partnership.

---

Definitions:

Accurate Notes

Precise recordings of information, discussions, or observations, crucial for referencing and understanding contexts.

Business Reports

Structured documents that convey information, analysis, and recommendations to support business decision-making.

Problem Statement

A concise description of an issue to be addressed or a condition to be improved upon, identifying the gap between the current state and desired state.

Job

An employment position in which an individual is contracted to perform specific duties in exchange for compensation.