Pablo has a $63,000 basis in his partnership interest. On May 9 of the current tax year,

Question:

Pablo has a $63,000 basis in his partnership interest. On May 9 of the current tax year, the partnership distributes to him, in a proportionate nonliquidating distribution, cash of $25,000, cash basis receivables with an inside basis of $0 and a fair market value of $16,000, and land with a basis and fair market value to the partnership of $80,000.

a. How much is Pablo’s realized and recognized gain on the distribution?

b. What is Pablo’s basis in the receivables, land, and partnership interest following the distribution?

Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...