Martin Has a Basis in a Partnership Interest of $100,000

question 11

Multiple Choice

Martin has a basis in a partnership interest of $100,000. At the end of the current year, the partnership distributed to Martin, in a proportionate nonliquidating distribution, cash of $10,000, inventory (basis to the partnership of $6,000 and fair market value of $12,000) , and land (basis to the partnership of $20,000 and fair market value of $15,000) . In addition, Martin's share of partnership debt decreased by $10,000 during the year. What basis does Martin take in the inventory and land and in the partnership interest following the distribution?

• A) $6,000 basis in inventory; $15,000 basis in land, $59,000 basis in partnership.
• B) $6,000 basis in inventory; $20,000 basis in land, $54,000 basis in partnership.
• C) $12,000 basis in inventory; $15,000 basis in land, $53,000 basis in partnership.
• D) $12,000 basis in inventory; $20,000 basis in land, $53,000 basis in partnership.
• E) $12,000 basis in inventory; $20,000 basis in land, $48,000 basis in partnership.

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