Using the number on the table below determine the tax treatment to the partner who...
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Accounting
Using the number on the table below determine the tax treatment to the partner who receives the distribution indicated, and then assuming the partnership has made a Section 754 election, determine the Section 734 adjustment, if any. If there is none write None or N/A
In EACH case the basis of the partners interest is $80,000 before the distribution.
The distribution consists of cash, a capital asset, and inventory as shown. If a column is blank then that type of asset was not distributed. The column for Liquidating indicates whether the distribution liquidated the partners interest or not.
Situation
Cash Received
Basis of Capital Asset
Basis of Inventory
Liquidating?
A
20,000
50,000
None Distributed
No
B
90,000
20,000
None Distributed
Yes
C
15,000
None Distributed
90,000
No
D
60,000
None Distributed
10,000
Yes
E
-0-
180,000
30,000
No
COMPLETE THIS TABLE
Situation
Partner Gain/
Basis to Cash
Basis to Property
Section 734 Adjustment, if any
A
B
C
D
E
Please provide explanation.
Answer & Explanation
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