ST partnership had the following assets: Inventory fmv 28000 basis 12000 land 70
ID: 2592263 • Letter: S
Question
ST partnership had the following assets: Inventory fmv 28000 basis 12000 land 70000 basis 48000 equipment 42000 basis 32000 total = fmv 14000 basis 92000 inventory is a section 751 asset and there is $10000 of sect. 1245 recapture of depreciation on the equipment. S is a 50% partner and T her copartner received a partial distribution from the partnership of the land. Each received land worth 35000 with basis of 24000. What is S's recognized gain ignoring partnership income? A) 0 B) 5000 capital gain C) 5000 ordinary gain D) 20000 ordinary gain
Explanation / Answer
when a partnership distributes non liquidating dividend to partner, no gain is recognised on the transfer.
hence, option A.0 is correct.
basis to the receiving partner will be the adjusted basis in the hands of the partnership
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