ABC Partnership makes a proportionate liquidating distribution to Stephanie of $
ID: 2601251 • 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? 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? A. $21345 B. $23985 C. $20,000 D. $20154 E. $20119 56.
What is Stephanie’s basis in the vehicle that was distributed in the liquidation? A. $1908 B. $1989 C. $1900 D. $2000 57.
What is Stephanie’s basis in the inventory that was distributed in the liquidation? A. $105000 B. $100000 C. $92856 D. $96354
Explanation / Answer
Stephnie's recognized gain or loss on the distribution is D. $0. as the cash received is less then his outside basis in partnership of $339,000. Although he is not in loss as he received machinery and inventory and also relieved of debt.
Stephnie's basis in the machinery is $20000
Stephnie's basis in the vehicle is $2000
Stephine's basis in the inventory is $105000