Question

Scott is a 50% partner in the LS Partnership. Scott has a basis in his partnership interest of $84,000 at the end of the current year, prior to any distribution. On December 31, Scott receives an operating distribution of $9,000 cash and a parcel of land with a $21,000 fair market value and a $12,000 basis to the partnership. LS has no debt or hot assets. What is the amount and character of Scott's recognized gain or loss

Answer 1

A. No gain or loss

B. Cash $9,000

Land $12,000

C. $63,000

Step-by-step explanation:

A. Based on the information given he RECOGNIZES NO GAIN OR LOSS

B. Based on the information given his basis in the distributed property will be basis of $9,000 cash and basis of $12,000 land

C. Calculation to determine his ending basis in his partnership interest

Ending basis=$84,000 - $9,000 - $12,000

Ending basis =$63,000

Therefore his ending basis in his partnership interest will be $63,000