Question

Markell's basis in the Markit Partnership is $58,000. In a proportionate liquidating distribution, Markell receives the following assets:

Tax Basis FMV
Cash $ 8,000 $ 8,000
Land A $ 20,000 $ 45,000
Land B $ 20,000 $ 25,000
What is Markell's basis in the distributed assets?

Answer 1

Markell's basis in the distributed assets is $48,000.

Step-by-step explanation:

To calculate Markell's basis in the distributed assets, we need to add up the tax basis of each asset received.

1. Cash: Markell's basis is $8,000.
2. Land A: Markell's basis is $20,000.
3. Land B: Markell's basis is $20,000.

Adding up the three assets, Markell's basis in the distributed assets is $8,000 + $20,000 + $20,000 = $48,000.