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Josh has a 25% capital and profits interest in the calendar-year GDJ Partnership. His adjusted basis for his partnership interest on October 15 of the

Josh has a 25% capital and profits interest in the calendar-year GDJ Partnership. His adjusted basis for his partnership interest on October 15 of the current year is $300,000. On that date, the partnership liquidates and makes a proportionate distribution of the following assets to Josh.


Partnership’s Basis in Asset

Asset’s Fair Market Value

Cash
Inventory

$ 70,000
120,000

$ 70,000
150,000


Calculate Josh’s recognized gain or loss on the liquidating distribution, if any.

How would your answer to #a., above, change if the partnership also distributed a small parcel of land it had held for investment to Josh? Assume the land has a $5,000 adjusted basis (FMV is $8,000) to the partnership.

Clearly identify the requirements being addressed. Show all calculations within the cells of an Excel spreadsheet.

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