Question

Pablo has a $180,200 basis in his partnership interest. On May 9 of the current tax year, the partnership distributes to him, in a proportionate current distribution, cash of $72,080, cash basis receivables with an inside basis of $0 and a fair market value of $45,050, and land with a basis and fair market value to the partnership of $234,260.
If an amount is zero, enter "0".a. How much is Pablo’s realized and recognized gain on the distribution?b. What is Pablo’s basis in the receivables, land, and partnership interest following the distribution?

Answer 1

Answer:

Explanation:

The computation of the realized gain is shown below:

= Cash + fair market value +  land with a basis and fair market value to the partnership - partnership interest

= $72,080 +$45,050 + $234,260 - $180,200

= $171,190

The regularized gain would be  $171,190 and recognized gain on the distribution would be zero.

The computation of the land would be

= Partnership interest - cash

= $180,200 - $72,080

= $108,120

And, the receivables and the partnership interest would be zero.