Exam 10: Special Partnership Issues

John has a basis in his partnership interest of $30,000. He receives a current distribution of $6,000 cash, unrealized receivables (FMV $11,000, basis $10,000), inventory (FMV $8,000, basis $4,000), and investment land (FMV $7,000, basis $6,000). The partners' relative interest in the Sec. 751 assets do not change as a result of the current distribution. His basis in the land is

Adnan had an adjusted basis of $11,000 for his interest in the Adnan and Donnell Partnership on December 31. On this date, Adnan received from the partnership, in complete liquidation of his interest, $10,000 cash and land with a $2,000 basis to the partnership and a $3,000 FMV. What is Adnan's basis for the land distributed to him?

Mirabelle contributed land with a $5,000 basis and a $9,000 FMV to MS Partnership four years ago. This year the land is distributed to Sergio, another partner in the partnership. At the time of distribution, the land had a $12,000 FMV. What is the impact of the distribution on Mirabelle's partnership basis?

Danielle has a basis in her partnership interest of $12,000. She receives a current distribution of $8,000 cash and equipment with a basis of $7,000. There is no potential gain under Sec. 737. What is her basis in the equipment?

Identify which of the following statements is true.

Identify which of the following statements is true.

Identify which of the following statements is true.

What is included in the definition of unrealized receivables?

The XYZ Partnership owns the following assets on December 31: Basis FMV Cash \ 20,000 \ 20,000 Unrealized receivables 0 Inventory \ 30,000 35,000 Land (Sec. 1231 asset) 40,000 70,000 By how much must XYZ reduce its unrealized receivables to avoid meeting the substantially apprec inventory test?

Carlos has a basis in his partnership interest of $30,000. He receives a current distribution of $6,000 cash, unrealized receivables (FMV $11,000, basis $10,000), inventory (FMV $8,000, basis $4,000), land held as an investment (FMV $7,000, basis, $6,000), and building (FMV $21,000, basis $9,000). The partners' relative interests in the Sec. 751 assets do not change as a result of the current distribution. Carlos's basis in the building is

Identify which of the following statements is false.

Steve sells his 20% partnership interest having a $28,000 basis to Nancy for $40,000 cash. At the time sale, the partnership has no liabilities and its assets are as follows: Basis FMV Cash \ 20,000 \ 20,000 Unrealized receivables 0 40,000 Inventory 10,000 40,000 Land (Sec. 1231) 110,000 100,000 The receivables and inventory are Sec. 751 assets. There is no agreement concerning the allocation o sales price. Steve must recognize

Ten years ago, Latesha acquired a one- third interest in Dana Associates, a partnership, for $26,000 cash. This year, Latesha's entire interest in the partnership is liquidated when her basis is $24,000. Dana's assets consist of the following: cash, $20,000; inventory with a basis of $46,000 and an FMV of $40,000. Dana has no liabilities. Latesha receives the cash of $20,000 in liquidation of her entire interest. What is Latesha's recognized loss on the liquidation of her interest in Dana?

Tony sells his one- fourth interest in the WindyCity Partnership to Bill for $100,000 cash when the partnership's assets are as follows: Assets Basis Fair Market Value Cash \ 80,000 \ 80,000 Unrealized receivables 0 72,000 Inventory 80,000 184,000 Land 64,000 Total \ \ 00,000 The partnership has no liabilities on the sale date. Tony's basis in his partnership interest on the date of the sale is $60,000. What are the amount and character of Tony's gain?

Do most distributions made by a partnership require a Sec. 751 calculation?

If a distribution occurs within years of the contribution date, in a nonliquidating distribution that does not qualify for Sec. 751 treatment, the distribution event may trigger a precontribution gain or loss.

Identify which of the following statements is true.

What is an electing large partnership? What are the advantages to the partnership of electing to be taxed under the electing large partnership rules?

Which of the following is a valid reason for making a 754 election?

Jerry has a $50,000 basis for his interest in JJ Partnership before receiving a current distribution consisting of $8,000 in money, accounts receivable having a zero basis to the partnership, and land having a $28,000 basis to the partnership. What will Jerry's basis be in these assets?