Ask Question
2 September, 06:17

Pablo has a $63,000 basis in his partnership interest. On May 9 of the current tax year the partnership distributes to him, in a proportionate nor liquidating distribution, cash of $25,000, cash basis receivables with an inside basis of $0 and a fair market value of $16,000, and land with a basis and fair market value to the partnership of $80,000.

1. How much is Pablo s realized and recognized gain on the distribution?

2. What is Pablo's basis in the receivables, land, and partnership interest following the distribution?

+1
Answers (1)
  1. 2 September, 07:26
    0
    1. How much is Pablo s realized and recognized gain on the distribution?

    Pablo's realized gain = $25,000 (cash) + $16,000 (cash receivable) + $80,000 (land) - $63,000 (basis) = $58,000

    Pablo's recognized gain = $0, since the cash distribution reduces his partnership basis to $38,000 ($63,000 - $25,000), the receivables have a $0 basis, and land distributions are not recognized as gains.

    2. What is Pablo's basis in the receivables, land, and partnership interest following the distribution?

    Pablo's basis in the receivables = $0

    Pablo's basis in the land = $63,000 - $25,000 = $38,000

    Pablo's partnership interest = $0
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Pablo has a $63,000 basis in his partnership interest. On May 9 of the current tax year the partnership distributes to him, in a ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers