Mark Receives a Nonliquidating Distribution of $10,000 Cash and a Parcel

question 109

Essay

Mark receives a nonliquidating distribution of $10,000 cash and a parcel of land having an adjusted basis of $18,000 and a fair market value of $25,000.
a.Mark's basis in his partnership interest prior to the distribution is $50,000.
(1)How much income will the partnership recognize due to the distribution?
(2)How much income will Mark recognize due to the distribution?
(3)What is Mark's basis in his partnership interest after the distribution ?
(4)What is Mark's basis in the land?
b.Assume Mark's basis in his partnership interest is instead $22,000 and redetermine the responses to questions (1)through (4).

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Definitions:

Lascaux Caves

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Twisted Perspective

An artistic technique where a figure is depicted in a profile view while some parts of the same figure are shown in frontal view.

Descriptive Convention

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Optical Convention

Established methods and practices in art and design that simulate how the human eye perceives the world.