54.ABC Partnership makes a proportionate liquidating distribution to Stephanie o

Question

54.ABC Partnership makes a proportionate liquidating distribution to Stephanie of $156,000 in cash, machinery worth $60,000 with a basis of $20,000, a vehicle worth $2,000 with a basis of $10,000 and inventory worth $100,000 and a basis of $105,000. Stephanie is also relieved of debt in the amount of $70,000. Stephanie has an outside basis in the partnership of $339,000. What is Stephanie’ recognized gain or loss on the distribution?

A. $156,000 B. $24,000 C. ($24,000) D. $0

55. What is Stephanie’s basis in the machinery that was distributed in the liquidation?

$21345

$23985

$20,000

$20154

$20119

56. What is Stephanie’s basis in the vehicle that was distributed in the liquidation?

$1908

$1989

$1900

$2000

57. What is Stephanie’s basis in the inventory that was distributed in the liquidation?

$105000

$100000

$92856

$96354

Explanation / Answer

54. The inbuilt profitor loss is arrived for a liquidation distribution as follows . Only the basis values are considered for arriving at the figure .

Please check if the options are right since the answer is $22,000.

55. As given in the question, machinery basis is $20,000 .

The answer is $20,000.

Cash 156000 Machinery 20000 Vehicle 10000 Debt relieved 70000 Inventory 105000 Total 361000 Less : Basis of Partnership 339000 Gain on Partnership 22000

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