Daniel's Basis in the DAT Partnership Is $135,000

question 86

Essay

Daniel's basis in the DAT Partnership is $135,000.DAT distributes its land to Daniel in complete liquidation of his partnership interest.DAT reports the following balance sheet just before the distribution:
If DAT has a §754 election in place,what is the amount of the special basis adjustment resulting from the distribution to Daniel? What is DAT's basis in its remaining assets?

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Definitions:

LRMC

Long-Run Marginal Cost, which is the additional cost of producing one more unit of output when all inputs, including capital, are variable.

LRAC

Long-Run Average Cost, a curve that shows the lowest possible average cost of production, allowing all factors of production to vary.

Long-run Elasticities

Measure of responsiveness of demand or supply to changes in price or income, considered over a period long enough for all adjustments to be made.

Short-run Elasticities

Measures of how responsive the quantity demanded or supplied of a good is to a price change over a short period.