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When Magdalena's outside basis is $157,500, she receives a liquidating distribution of $39,375 cash and a proportionate share of inventory having a partnership basis of
When Magdalena's outside basis is $157,500, she receives a liquidating distribution of $39,375 cash and a proportionate share of inventory having a partnership basis of $55,125 and a fair market value of $63,000. The distribution results in a liquidation of both the partnership and her interest.
a. How much is Magdalena's basis in the inventory received? $ _______
b. What is the amount of any gain or loss recognized on the liquidation? She has a recognized
a capital loss of $______ on the liquidation.
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