Melissa Is a Partner in a Continuing Partnership

question 20

Essay

Melissa is a partner in a continuing partnership.At the end of the current year, the partnership makes a proportionate, nonliquidating distribution to Melissa of $50,000 cash, inventory (basis of $22,000, fair market value of $20,000), and land (basis of $30,000, fair market value of $60,000).Melissa's basis in the partnership interest was $90,000 before the distribution.What is Melissa's basis in the inventory, land, and partnership interest following the distribution?

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Definitions:

Radial Cleavage

A type of embryonic development in deuterostomes where the planes of cell division are either parallel or perpendicular to the vertical axis of the embryo, resulting in the cells being positioned directly above or beside each other.

Cleavage

Series of mitotic cell divisions, without growth, that converts the zygote to a multicellular blastula.

Meiotic Cell Divisions

A type of cell division that reduces the chromosome number by half, leading to the production of gametes in sexual reproduction.

Common Ancestor

The most recent ancestral form or species from which two different species evolutionary diverged.