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Using the number on the table below determine the tax treatment to the partner who receives the distribution indicated, and then assuming the partnership has

Using the number on the table below determine the tax treatment to the partner who receives the distribution indicated, and then assuming the partnership has made a Section 754 election, determine the Section 734 adjustment, if any. If there is none write None or N/A

In EACH case the basis of the partners interest is $50,000 before the distribution.

The distribution consists of cash, a capital asset, and inventory as shown. If a column is blank then that type of asset was not distributed. The column for Liquidating indicates whether the distribution liquidated the partners interest or not.

Situation

Cash Received

Basis of Capital Asset

Basis of Inventory

Liquidating?

A

10,000

30,000

None Distributed

No

B

10,000

30,000

None Distributed

Yes

C

10,000

None Distributed

30,000

No

D

60,000

None Distributed

30,000

Yes

E

-0-

20,000

30,000

No

COMPLETE THIS TABLE

Situation

Partner Gain/

Basis to Cash

Basis to Property

Section 734 Adjustment, if any

A

B

C

D

E

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