Karli Owns a 25% Capital and Profits Interest in the Calendar

question 138

Essay

Karli owns a 25% capital and profits interest in the calendar year KJDV Partnership. Her adjusted basis for her partnership interest on July 1 of the current year is $200,000. On that date, she receives a proportionate current nonliquidating) distribution of the following assets. $\begin{array}{lrr}&\text { Partnership's Basis in Asset} &\text { Asset's Fair Market Value }\\\text { Cash } & \$ 120,000 & \$ 120,000 \\\text { Inventory } & 50,000 & 60,000 \\\text { Land (held for investment) } & 70,000 & 100,000\end{array}$

a. Calculate Karli's recognized gain or loss on the distribution if any.
b. Calculate Karli's basis in the inventory received.
c. Calculate Karli's basis in land received. The land is a capital asset.
d. Calculate Karli's basis for her partnership interest after the distribution.