Question
Preakness Partnership makes a current distribution to Prasad, consisting of $30,000 in cash, land with a fair market value of $50,000 (partnership basis $55,000), and
Preakness Partnership makes a current distribution to Prasad, consisting of $30,000 in cash, land with a fair market value of $50,000 (partnership basis $55,000), and inventory with a fair market value of $8,000 ($3,000 partnership basis). Immediately prior to the distribution, Prasad's outside basis in the partnership was $35,000. What amount of gain will Prasad recognize on the distribution, and what is Prasad's resulting basis in the land?
| Recognized Gain | Basis in Land | |
|---|---|---|
| a. | $3,000 | $5,000 |
| b. | $0 | $0 |
| c. | $0 | $2,000 |
| d. | $3,000 | $0 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
The International Corporate Governance System Audit Roles And Board Oversight
Authors: F. Lessambo
1st Edition
134947178X, 978-1349471782
