Karli Owns a 25% Capital and Profits Interest in the Calendar-Year

question 131

Essay

Karli owns a 25% capital and profits interest in the calendar-year KJDV Partnership. Her adjusted basis for her partnership interest on July 1 of the current year is $200,000. On that date, she receives a proportionate nonliquidating distribution of the following assets:

a. Calculate Karli's recognized gain or loss on the distribution, if any.
b. Calculate Karli's basis in the inventory received.
c. Calculate Karli's basis in land received. The land is a capital asset.
d. Calculate Karli's basis for her partnership interest after the distribution.

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Definitions:

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