Cliffs basis in his Aero Partnership interest is $11,000. Cliff receives a distribution of $22,000 cash from Aero in complete liquidation of his interest. Aero is an equal partnership with the following balance sheet:

			Tax Basis		FMV
Assets:
Cash		$	22,000		$	22,000
Investment			8,800			8,800
Land			2,200			35,200
Totals		$	33,000		$	66,000
Liabilities and capital:
Capital	Chris		11,000
	Cliff		11,000
	Cooper		11,000
Totals		$	33,000

13.

value: 1.00 points

Required information

a-1. What is the amount and character of Cliffs recognized gain or loss?

	$11,000 ordinary income and $1,000 capital gain
	$5,000 ordinary income and $8,000 capital gain
	$13,000 capital loss
	$11,000 capital gain
	Neither gain nor loss recognized

a-2. Will the distribution have any effect on the partnership assets?

	Yes
	No

rev: 02_27_2017_QC_CS-80803

Hints

References

eBook & Resources

Hint #1

Check my work

14.

value: 1.00 points

Required information

b. If Aero has a 754 election in place, what is the amount of the special basis adjustment?