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

question 119

Essay

Connie owns a one-third capital and profits interest in the calendar year CAB Partnership. Her adjusted basis for her partnership interest was $120,000 when she received a proportionate current nonliquidating) distribution of the following assets. $\begin{array}{lrr}&\text { Partnership's Basis in Asset} &\text { Asset's Fair Market Value }\\\text { Cash } & \$ 140,000 & \$ 140,000 \\\text { Land held for investment } & 30,000 & 60,000\end{array}$

a. Calculate Connie's recognized gain or loss on the distribution if any.
b. Calculate Connie's basis in the land received.
c. Calculate Connie's basis for her partnership interest after the distribution.

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Definitions:

Inventory Costing

The method used to value inventory, including techniques like FIFO (First In, First Out), LIFO (Last In, First Out), and weighted average cost.

FIFO Method

"First In, First Out" method of inventory valuation where the oldest inventory items are recorded as sold first.

Job Order Cost Accounting

A costing method that gathers costs of materials, labor, and overhead for individual jobs or batches.