1180. CHAPTER 11â??PARTNERSHIPS: DISTRIBUTIONS, TRANSFER OF INTERESTS,45 Stephanie receives a…

1180. CHAPTER 11â??PARTNERSHIPS: DISTRIBUTIONS, TRANSFER OF INTERESTS,45 Stephanie receives a…

1180. CHAPTER
11—PARTNERSHIPS: DISTRIBUTIONS, TRANSFER OF INTERESTS,45
Stephanie receives a proportionate nonliquidating distribution from the QRS
Partnership. The distribution consists of $60,000 cash and property with an
adjusted basis to the partnership of $30,000 and a fair market value of
$25,000. Immediately before the distribution, Stephanie’s adjusted basis for
her partnership interest is $80,000. Stephanie’s basis in the noncash property
received is:

a.
$15,000.
b. $20,000.
c. $25,000.
d. $30,000.
e. None of the above.

1181. CHAPTER
11—PARTNERSHIPS: DISTRIBUTIONS, TRANSFER OF INTERESTS,46
At the beginning of the year, Elsie’s basis in the E&G Partnership interest
is $60,000. She receives a proportionate nonliquidating distribution from the
partnership consisting of $10,000 of cash, unrealized accounts receivable
(basis of $0, fair market value $30,000), and inventory (basis of $10,000, fair
market value of $20,000). After the distribution, Elsie’s bases in the accounts
receivable, inventory, and partnership interest are:

a.
$0; $10,000; and $40,000.
b. $0; $20,000; and $30,000.
c. $30,000; $10,000; and $10,000.
d. $30,000; $20,000; and $0.
e. None of the above.

1182. CHAPTER
11—PARTNERSHIPS: DISTRIBUTIONS, TRANSFER OF INTERESTS,47
Megan’s basis was $100,000 in the MAR Partnership interest just before she
received a proportionate nonliquidating distribution consisting of land held
for investment (basis of $80,000, fair market value of $100,000) and inventory
(basis of $60,000, fair market value of $60,000). After the distribution,
Megan’s bases in the land and inventory are, respectively:

a.
$80,000 and $20,000.
b. $100,000 and $0.
c. $40,000 and $60,000.
d. $50,000 and $50,000.
e. None of the above.

1183. CHAPTER
11—PARTNERSHIPS: DISTRIBUTIONS, TRANSFER OF INTERESTS,48
Matt receives a proportionate nonliquidating distribution. At the beginning of
the partnership year, the basis of his partnership interest is $60,000. During
the year, he received a cash distribution of $25,000 and a property
distribution (basis of $20,000 and fair market value of $12,000). In addition,
Matt’s share of partnership liabilities was reduced by $20,000 during the year.
How much gain or loss does Matt recognize; what is his basis in the property he
received; and what is his remaining basis in the partnership interest?

a.
$3,000 loss; $12,000 basis in property; $0 remaining basis.
b. $0 gain or loss; $15,000 basis in
property; $0 remaining basis.
c. $0 gain or loss; $20,000 basis in
property; $15,000 remaining basis.
d. $0 gain or loss; $12,000 basis in
property; $23,000 remaining basis.
e. $5,000 gain; $20,000 basis in
property; $0 remaining basis.

1184. CHAPTER
11—PARTNERSHIPS: DISTRIBUTIONS, TRANSFER OF INTERESTS,49
Martin has a basis in a partnership interest of $100,000. At the end of the
current year, the partnership distributed to Martin, in a proportionate
nonliquidating distribution, cash of $10,000, inventory (basis to the
partnership of $6,000 and fair market value of $12,000), and land (basis to the
partnership of $20,000 and fair market value of $15,000). In addition, Martin’s
share of partnership debt decreased by $10,000 during the year. What basis does
Martin take in the inventory and land and in the partnership interest following
the distribution?

a.
$6,000 basis in inventory; $15,000 basis in land, $59,000 basis in partnership.
b. $6,000 basis in inventory; $20,000
basis in land, $54,000 basis in partnership.
c. $12,000 basis in inventory; $15,000
basis in land, $53,000 basis in partnership.
d. $12,000 basis in inventory; $20,000
basis in land, $53,000 basis in partnership.
e. $12,000 basis in inventory; $20,000
basis in land, $48,000 basis in partnership.

1185. CHAPTER
11—PARTNERSHIPS: DISTRIBUTIONS, TRANSFER OF INTERESTS,50
Andrew receives a proportionate nonliquidating distribution from the AEF
Partnership. The distribution consists of $50,000 cash and property (adjusted
basis to the partnership of $34,000 and fair market value of $42,000).
Immediately before the distribution, Andrew’s adjusted basis in the partnership
interest was $40,000. His basis in the noncash property received is:

a.
$0.
b. $34,000.
c. $42,000.
d. $50,000.
e. None of the above.

1186. CHAPTER
11—PARTNERSHIPS: DISTRIBUTIONS, TRANSFER OF INTERESTS,51
Aaron owns a 30% interest in a continuing partnership. The partnership
distributes a $35,000 year-end cash bonus to all the partners. In a proportionate
nonliquidating distribution, the partnership also distributed property (basis
of $15,000; fair market value of $20,000) to Aaron. Immediately before the
distribution, Aaron’s basis in the partnership interest was $50,000. As a
result of the distribution, Aaron recognizes:

a.
No gain or loss.
b. Ordinary loss of $5,000.
c. Capital loss of $5,000.
d. Ordinary gain of $5,000.
e. Capital gain of $5,000.

1187. CHAPTER
11—PARTNERSHIPS: DISTRIBUTIONS, TRANSFER OF INTERESTS,52
Eric receives a proportionate nonliquidating distribution when the basis of his
partnership interest is $80,000. The distribution consists of $20,000 in cash
and property with an adjusted basis to the partnership of $45,000 and a fair
market value of $40,000. Eric’s basis in the noncash property and his remaining
basis in the partnership interest are:

a.
$45,000; $35,000.
b. $45,000; $15,000.
c. $40,000; $40,000.
d. $40,000; $20,000.
e. None of the above.

1188. CHAPTER
11—PARTNERSHIPS: DISTRIBUTIONS, TRANSFER OF INTERESTS,53
Martha receives a proportionate nonliquidating distribution when the basis of
her partnership interest is $50,000. The distribution consists of $60,000 cash
and noninventory property (adjusted basis to the partnership of $20,000; fair
market value of $23,000). How much gain or loss does Martha recognize, and what
is her basis in the distributed property and in her partnership interest
following the distribution?

a.
$0 gain or loss; $20,000 basis in property; $0 basis in partnership interest.
b. $0 gain or loss; $23,000 basis in
property; $2,000 basis in partnership interest.
c. $10,000 capital gain; $0 basis in
property; $0 basis in partnership interest.
d. $10,000 capital gain; $20,000 basis
in property; $0 basis in partnership interest.
e. $10,000 ordinary income; $0 basis in
property; $10,000 basis in partnership interest.

1189. CHAPTER
11—PARTNERSHIPS: DISTRIBUTIONS, TRANSFER OF INTERESTS,54
Nicole’s basis in her partnership interest was $160,000, including her $50,000
share of partnership liabilities. The partnership decides to liquidate, and
after repaying all liabilities, distributes all remaining assets
proportionately to the partners. Nicole receives $30,000 cash and accounts
receivable with a $50,000 basis and a $52,000 fair market value to the
partnership. What gain or loss does Nicole recognize, and what is her basis in
the accounts receivable?

a.
$80,000 loss; $50,000 basis.
b. $30,000 loss; $50,000 basis.
c. $28,000 loss; $52,000 basis.
d. $78,000 loss; $52,000 basis.
e. $0 loss; $80,000 basis.

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