IMG 0728JPEG Photos ecet distribution cash of s200 and land worth $700 tv a) Doe
ID: 2529978 • Letter: I
Question
IMG 0728JPEG Photos ecet distribution cash of s200 and land worth $700 tv a) Does May have taxable income as a result of the distribu e) Does your answer to parts (a) and (b) change (and if so h 4 May has an outside basis in the KM partnership of $500. S h which the partnership has an on? What is May 's basis in the land? the cash distributed was $5507 basis in the land was $450. What is May's basis in the land? b) how) it d) Assume the cash distributed was $200. Suppose the inside O Type here to search The nartners share 1:50 PM 4/24/2018Explanation / Answer
Part (a):
Particulars
Amount ($)
Amount ($)
Outside basis in the partnership
500
Less:
Cash distribution received
200
Inside basis of land received
100
300
Shortfall of distribution from outside basis of May in partnership (500 -300)
200
No, taxable income as the total distribution is less than the inside basis of May in the partnership.
Part (b):
May’s basis in the land is the inside basis of the land to the partnership, i.e. $100.
Part (c):
Particulars
Amount ($)
Amount ($)
Outside basis in the partnership
500
Total distribution
Cash distribution received
550
Inside basis of land received
100
650
Taxable income (650 -500)
150
Yes, the answer to part (a) will change as there will be taxable income to May of $150 however, the answer of part (b) would remain unchanged with $100.
Part (d):
In this case May’s basis in the land is the inside basis of the land, i.e. $450.
Particulars
Amount ($)
Amount ($)
Outside basis in the partnership
500
Less:
Cash distribution received
200
Inside basis of land received
100
300
Shortfall of distribution from outside basis of May in partnership (500 -300)
200