Answer the following questions regarding four independent liquidating distributions in which the partnership also liquidates.

1. Prepare a Microsoft Excel spreadsheet to determine the amount and character of any gain or loss to be recognized by each partner and the basis of each asset (other than cash) received. In each case, assume that distributions of hot assets are proportionate to the partners (or there are no hot assets). You can use the format in Concept Summary 11.3, or you can create your own. In either case, be sure you can explain your rationale.

   If you use the format in Concept Summary 11.3, set up an Inputs section for the amounts on lines 1, 2, 5, and 8. Code the formulas shown in the Calculations section to determine the amounts in the remaining lines. You will use sum, min, max, and if/then/else formulas. Enter a partners relevant facts in the Inputs section of your spreadsheet, and simply adjust the input numbers to address the remaining situations.

   1. Zaara has a partnership basis of $40,000 and receives a distribution of $50,000 in cash.

   2. Mark has a partnership basis of $50,000 and receives $20,000 cash and a capital asset with a basis to the partnership of $25,000 and a fair market value of $40,000.

   3. Neil has a partnership basis of $100,000 and receives $40,000 cash, inventory with a basis to the partnership of $30,000, and a capital asset with a partnership basis of $20,000. The inventory and capital asset have fair market values of $20,000 and $30,000, respectively.

   4. Oscar has a partnership basis of $40,000 and receives a distribution of $10,000 cash and an account receivable with a basis of $0 to the partnership (value is $15,000).

2. In each of the four situations in part (a), are any planning techniques available to the partnership to avoid any lost basis results? Explain.

3. In the four situations in part (a), would your answers change if the transaction had been a current distribution? Explain

Kindly answer 2 and 3. 1 has been answered before.