ACCT 540

Using the number on the table below determine the tax treatment to the partner who receives the distribution indicated, and then assuming the partnership has made a Section 754 election, determine the Section 734 adjustment, if any. If there is none write None or N/A

In EACH case the basis of the partners interest is $80,000 before the distribution.

The distribution consists of cash, a capital asset, and inventory as shown. If a column is blank then that type of asset was not distributed. The column for Liquidating indicates whether the distribution liquidated the partners interest or not.

SituationCash ReceivedBasis of Capital AssetBasis of InventoryLiquidating? A200,00050,000None DistributedNo B10,00020,000None DistributedYes C30,000None Distributed10,000No D30,000None Distributed10,000Yes E-0-20,00030,000No

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*For Partner Gain/Loss and Section 734 adjustment please specify the amount instead of yes or now. Thank you!

SituationPartner Gain/Basis to CashBasis to PropertySection 734 Adjustment, if anyA B C D E