Question
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
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
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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?
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