Bill and Wayne form a real estate partnership. Bill contributes Blackacre, which is worth $600,000...
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Bill and Wayne form a real estate partnership. Bill contributes Blackacre, which is worth $600,000 and in which he has a tax basis of $100,000, for an 80% interest in the partnership. Wayne contributes Whiteacre, which is worth $150,000 and in which he has a tax basis of $125,000, for a20% interest. Five years later, Blackacre is worth$750,000 and Whiteacre is worth $300,000 and there has been no change to either inside or outside basis. The partnership distributes Whiteacre to Bill and the interests of Bill and Wayne in the partnership are adjusted to 72% and 28%, respectively. The partnership has noliabilities. How much gain, ifany, do Bill and Wayne recognize on this distribution?
a) Bill, $0; Wayne, $0 b) Bill, $650,000; Wayne, $175,000 c) Bill, $200,000; Wayne, $25,000 d) Bill, $500,000; Wayne, $25,000
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