Question
Josh has a 25% capital and profits interest in the calendar-year GDJ Partnership. His adjusted basis for his partnership interest on October 15 of the
Josh has a 25% capital and profits interest in the calendar-year GDJ Partnership. His adjusted basis for his partnership interest on October 15 of the current year is $300,000. On that date, the partnership makes a proportionate liquidating distribution of the following assets to Josh.
| Partnerships Basis in Asset | Assets Fair Market Value |
Cash Inventory | $ 70,000 120,000 | $ 70,000 150,000 |
a. | Determine Joshs basis in the inventory and his recognized gain or loss on the liquidating distribution, if any. |
b. | Assume that in addition to the cash and inventory, GDJ distributed land to Josh having a basis to GDJ of $5,000 and a fair market value of $8,000. Determine Joshs basis in the inventory and the land and his recognized gain or loss on the liquidating distribution, if any. |
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