Doris Owns a 1/3 Capital and Profits Interest in the Calendar-Year

question 85

Essay

Doris owns a 1/3 capital and profits interest in the calendar-year DB Partnership. Her adjusted basis for her partnership interest on July 1 of the current year is $20,000. On that date, she receives an operating distribution of her share of partnership assets shown below:
What is the amount and character of Doris' gain or loss on the distribution? What is her basis in the distributed assets?
$$\begin{array} { | l | r | r | } \hline & \text { Partnership's Basis in } & \text { Assets Fairmarket } \\&\text { Asset } & \text { Value } \\\hline \text { Cash } & \$ 81,000 & \$ 81,000 \\\hline \text { Inventory } & 36,000 & 24,000 \\\hline \text { Land } & 120,000 & 135,000 \\\hline\end{array}$$

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Definitions:

Timely Basis

Describes actions or events occurring at appropriate or planned intervals, without undue delay.

Civil Rights Act

A landmark piece of legislation in the United States that outlawed discrimination based on race, color, religion, sex, or national origin.

Legal Implications

The potential legal consequences or effects that actions or decisions can have within the realm of law.

Discrimination Charge

A formal complaint filed by an individual alleging unfair treatment or prejudicial behavior based on specific characteristics, such as race, gender, or age.