Adam and Alyssa are equal partners in the PartiPilo Partnership. The partners formed the partnership three years ago by contributing cash. Prior to any distributions, the partners have the following bases in their partnership interests:
Partner Outside Basis
Adam....................$ 12,000
Alyssa.....................12,000
On December 31 of the current year, the partnership makes a pro-rata operating distribution of:
Partner Distribution
Adam Cash............$ 16,000
Alyssa Cash.................8,000
Property ...................8,000 (FMV) ($6,000 basis to partnership)
a. What is the amount and character of Adam's recognized gain or loss?
b. What is Adam's remaining basis in his partnership interest?
c. What is the amount and character of Alyssa's recognized gain or loss?
d. What is Alyssa's basis in the distributed assets?
e. What is Alyssa's remaining basis in her partnership interest?