ABC Partnership makes a proportionate liquidating distribution to Stephanie of $
ID: 2601126 • Letter: A
Question
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?
55. What is Stephanie’s basis in the machinery that was distributed in the liquidation?
A. $21345
B. $23985
C. $20,000
D. $20154
E. $20119
Explanation / Answer
Gain on distribution is $22000.
Total assets received less basis in partnership
= 361000-339000
Basis in machinery = $20000.