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Helens basis in Haywood partnership is $360,000. Haywood distributes all the land to Helen in complete liquidation of her partnership interest. The partnership reports the
| Helens basis in Haywood partnership is $360,000. Haywood distributes all the land to Helen in complete liquidation of her partnership interest. The partnership reports the following balance sheet just before the distribution: |
| Tax Basis | FMV | ||||
| Assets: | |||||
| Cash | $ | 297,000 | $ | 297,000 | |
| Stock (investment) | 642,000 | 297,000 | |||
| Land | 141,000 | 297,000 | |||
| Totals | $ | 1,080,000 | $ | 891,000 | |
| Liabilities and capital: | |||||
| Capital Charles | $ | 360,000 | |||
| Esther | 360,000 | ||||
| Helen | 360,000 | ||||
| Totals | $ | 1,080,000 | |||
| a-1. | What is the amount and character of Helens recognized gain or loss? | |
| a-2. | Will the distribution have any effect on the partnership assets? | |||||
| ||||||
| b. | If Haywood has a 754 election in place, what is the amount of the special basis adjustment? | |
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