What will be his tax basis in the property received

Reference no: EM132219653

Questions -

Q1. Wilma Clay and Nathan are equal partners in the cousins partnership. At the end of the year, Wilma's tax basis in her partnership interest was $14,000, clay's basis was $25,000 and Nathan's basis $8,000. In a non-liquidating distribution, the partnership distributed investment property to Clay with a tax basis of $18,000 and a fair market value of $45,000.

a) How much gain must Clay recognize on receipt of the distribution?

b) What basis will he take ii the property received from the partnership?

c) What will be his remaining basis in the partnership interest?

Q2. Wayne, a one-third partner in the Countem partnership, received investment property worth $100,000 in redemption (i.e., partial liquidation) of half his interest. The partnerships tax basis in the investment property was $48,000. Waynes tax basis in his partnership interest prior to the distribution was $40,000.

a) Will Wayne be required to recognize any gain or loss on receipt of the distribution from the partnership?

b) What will be his tax basis in the property received?

c) What will be his remaining basis in his partnership interest?

Reference no: EM132219653

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