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?

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Definitions:

Industrial Revolution

A period of major industrialization from the late 18th to mid-19th century that transformed mainly agrarian, rural societies in Europe and America into industrialized, urban ones.

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Nobles of the Robe

French nobility who earned their titles through holding certain judicial or administrative offices, as opposed to "Nobles of the Sword" who inherited their titles through lineage.

Administrative Offices

Departments or units within an organization responsible for maintaining the daily operations and providing administrative support to facilitate the workflow.