The ABCD partnership has four partners. Each partner’s adjusted basis in the par
ID: 2577622 • Letter: T
Question
The ABCD partnership has four partners. Each partner’s adjusted basis in the partnership interest owned by that partner was $40,000 on the first day of last year. The partnership reported net income for last year of $80,000 (there were no separately stated items to take into account). The partnership distributed pro rata to each partner $55,000 in cash plus parcels of land that each had a fair market value of $25,000 and a basis to the partnership of $10,000. How much is includible in each partner’s gross income for the year as the result of the distribution?
a. $10,000
b. $55,000
c. $25,000
d. $5,000
e. 0
Explanation / Answer
The answer for the above questions is option d that is 5000
(40000-20000-25000) = 5000
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