The ABCD partnership has four partners. Each partner’s adjusted basis in the par
ID: 2589290 • 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 identical 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?
Explanation / Answer
Answer:- $25000
$25000 is the amount which is inclusive in each partners gross income for the year as the result of the distribution.
This is the amount each partner receives in the form of land distributed to them.
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