Daniel's Basis in the DAT Partnership Is $135,000 If DAT Has a §754 Election in Place, What Is

question 101

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: \begin{array}{c}\begin{array}{lll}\text{Assets:}\\\text{Cash}\\\text{Stock (investment)}\\\text{Land}\\\text{Totals}\\\\\text{Liabilities and capital:}\\\text{Capital - Daniel}\\\quad\text{- Alexandra}\\\quad\text{- Travis}\\\text{Totals}\\\end{array}\begin{array}{lll}\underline{\text { Basis }} \\\mathbf{\$ 110 , 0 0 0} \\\mathbf{240 , 0 0 0} \\\underline{\mathbf{55 , 0 0 0}} \\\underline{\mathbf{\$405 , 0 0 0}} \\\\\\\mathbf{\$135 , 0 0 0} \\\mathbf{135 , 0 0 0} \\\underline{135,000} \\\mathbf{\$ 405 , 0 0 0}\\\end{array}\begin{array}{lll}\underline{\text { FMV }} \\\$ 110,000 \\\underline{110,000} \\\underline{110,000} \\\underline{\$ 330,000}\\\\\\\\\\\\\\end{array}\end{array} 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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