Question
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 | $ 70,000 | $ 70,000 |
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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