Exam 10: Special Partnership Issues

Becky has a $24,000 basis in her partnership interest.She receives a current distribution of $4,000 cash,unrealized receivables with a basis of $12,000 and an FMV of $16,000,and land held as an investment with a basis of $3,000 and an FMV of $8,000.The partners' relative interests in the Sec.751 assets do not change as a result of the current distribution.The basis of her partnership interest following the distribution is

The definition of "inventory" for purposes of Sec.751 includes

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?

What is the character of the gain/loss on the sale of a partnership interest?

A partnership terminates for federal income tax purposes if

Identify which of the following statements is true.

What is included in the definition of unrealized receivables?

What is the definition of "substantially appreciated inventory"?

The XYZ Partnership owns the following assets on December 31: By how much must XYZ reduce its unrealized receivables to avoid meeting the substantially appreciated inventory test?

Identify which of the following statements is true.

Helmut contributed land with a basis of $5,000 and an FMV of $10,000 to the HG Partnership five years ago to acquire a 50% partnership interest.This year the land is distributed to another partner,Gail,when its FMV is $11,000.No other distributions have been made since Helmut became a partner.When the land is distributed to Gail,Helmut recognizes a gain of

Last year,Cara contributed investment land with an FMV of $24,000 and basis of $18,000 to the CDE Partnership.CDE made no distributions during last year,and Cara's basis in her partnership interest on December 31 of last year was $28,000.On January 1 of this year,the partnership distributed cash of $30,000 to Cara and distributed the land contributed by Cara to another partner,David.On the distribution date,the land had a $27,000 FMV.Assume the CDE Partnership reported no profit or loss this year.How much gain (if any)must Cara recognize as a result of the distributions? What is her basis in the partnership after the distributions?

Ted King's basis for his interest in the Troy Partnership is $24,000.In complete liquidation of his interest,King receives cash of $4,000 and real property (not a Sec.751 asset)having an FMV of $40,000.Troy's adjusted basis for this realty is $15,000.Section 736 does not apply.King's basis for this realty is

A partner's holding period for property distributed as a current distribution begins on the date of distribution.

Joshua is a 40% partner in the XY Partnership when he sells his entire interest to Stanley for $60,000 cash.At the time of the sale,Joshua's basis is $36,000,which includes his $10,000 share of partnership liabilities.The partnership has no Sec.751 assets.Calculate Joshua's gain or loss on the sale.

The Internal Revenue Code includes which of the following assets in the definition of Sec.751 properties?

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

Identify which of the following statements is true.

When must a partnership make mandatory basis adjustments?

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.How much gain should Mirabelle and Sergio recognize?