Question
Questions 25 based upon the following facts : Zoes entire interest in a cash-method partnership is terminated by means of the following liquidating distribution: (i)
Questions 25 based upon the following facts: Zoes entire interest in a cash-method partnership is terminated by means of the following liquidating distribution: (i) $70 of cash, (ii) inventory with a tax basis of $50 and a value of $60, and (iii) land with a tax basis of $30 and a value of $50. Assume that the partnership has held the land for many years.
1. What is the basis of the land in Zoes hands after the distribution if her outside basis was $300 at the time of the distribution?
2. What are the tax consequences if Zoe receives only the cash and inventory (the land was not distributed to her) and her outside basis was $300 at the time of the distribution?
3. Assume that Zoe receives the cash, inventory and land in the distribution. What is Zoes basis in the inventory and the land after the distribution if Zoes outside basis was $140 at the time of the distribution?
Show your calculation
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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