Oliver Receives a Nonliquidating Distribution of Land Having a $25,000

question 39

Essay

Oliver receives a nonliquidating distribution of land having a $25,000 adjusted basis and a $32,000 FMV from the OK Partnership.At the time of the distribution,Oliver's basis in his partnership interest is $30,000.
a.What is the amount of recognized gain or loss on the distribution?
b.What is Oliver's basis in his partnership interest following the distribution?
c.What is Oliver's basis in the land?

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Definitions:

Kumquats

Small, oval citrus fruits with sweet edible skin and sour flesh, often eaten whole or used in marmalades and jellies.

Wage Rate

The amount of money paid to an employee by an employer in exchange for work performed, typically expressed per hour, day, or piece produced.

Labor Income

Earnings obtained from work or employment, including wages, salaries, and benefits.

Lump Sum Payment

A single payment made at a particular time, especially one that completes a total amount owed.