Pettifog Partnership distributes cash of $20,000, hot assets worth $5,000, and a parcel of land (a sect 1231 asset to the partnership) in a proportionate liquidating distribution to Gupta, a partner The hot assets have a basis of $0 to the partnership The land has a fair market value of $80,000 and...

Pettifog Partnership distributes cash of $20,000, hot assets worth $5,000, and a parcel of land (a §

Question:

Pettifog distributes cash of $20,000, hot assets worth $5,000, and a parcel of land (a § 1231 asset to the in a proportionate liquidating to Gupta, a partner. The hot assets have a basis of $0 to the The land has a fair market value of $80,000 and an inside basis of $55,000. Gupta€™s outside basis in Pettifog just prior to the is $85,000. Identify the amount of gain or loss Gupta must recognize and Gupta€™s resulting basis in the land.

Gain or Loss Basis in Land $0 $5,000 $0 a. b. $10,000 loss $0 $65,000 C. d. $5,000 loss $0

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...