Question
Karli owns a 25% capital and profits interest in the calendar-year KJDV Partnership. Her adjusted basis for her partnership interest on July 1 of the
Karli owns a 25% capital and profits interest in the calendar-year KJDV Partnership. Her adjusted basis for her partnership interest on July 1 of the current year is $200,000. On that date, she receives a proportionate current (nonliquidating) distribution of the following assets.
| PARTNERSHIP'S BASIS IN ASSET | ASSET'S FAIR MARKET VALUE | |
| CASH | $120,000 | $120,000 |
| INVENTORY | $50,000 | $60,000 |
| LAND (HELD FOR INVESTMENT) | $70,000 | $100,000 |
a. Calculate Karlis recognized gain or loss on the distribution, if any.
b. Calculate Karlis basis in the land received. The land is a capital asset. SHOW YOUR WORK
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Core Concepts Of Accounting Information Systems
Authors: Nancy A. Bagranoff, Mark G. Simkin, Carolyn Strand Norman
11th Edition
9780470507025, 0470507020
