Liquidating property distribution depreciation

The distributed inventory items have a basis to the partnership of 0 and a fair market value of 0.Asset X has an adjusted basis to the partnership of and a fair market value of 0.Asset Y has an adjusted basis to the partnership of 0 and a fair market value of .Neither of the assets consists of inventory items or unrealized receivables.

of this paragraph except C receives a distribution in liquidation of its entire partnership interest of

of this paragraph except C receives a distribution in liquidation of its entire partnership interest of $1,000 cash and inventory items having a basis to the partnership of $6,000.

Asset X is then allocated $350, the amount of unrealized appreciation in Asset X.

Finally, the remaining basis, $50, is allocated to Assets X and Y in proportion to their fair market values: $40 to Asset X (400/500 × $50), and $10 to Asset Y (100/500 × $50).

Therefore, after the distribution, A has an adjusted basis of $440 in Asset X and $110 in Asset Y.

B is a one-fourth partner in partnership PRS and has an adjusted basis in its partnership interest of $200.

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of this paragraph except C receives a distribution in liquidation of its entire partnership interest of $1,000 cash and inventory items having a basis to the partnership of $6,000.Asset X is then allocated $350, the amount of unrealized appreciation in Asset X.Finally, the remaining basis, $50, is allocated to Assets X and Y in proportion to their fair market values: $40 to Asset X (400/500 × $50), and $10 to Asset Y (100/500 × $50).Therefore, after the distribution, A has an adjusted basis of $440 in Asset X and $110 in Asset Y.B is a one-fourth partner in partnership PRS and has an adjusted basis in its partnership interest of $200.

,000 cash and inventory items having a basis to the partnership of ,000.

Asset X is then allocated 0, the amount of unrealized appreciation in Asset X.

Finally, the remaining basis, , is allocated to Assets X and Y in proportion to their fair market values: to Asset X (400/500 × ), and to Asset Y (100/500 × ).

Therefore, after the distribution, A has an adjusted basis of 0 in Asset X and 0 in Asset Y.

B is a one-fourth partner in partnership PRS and has an adjusted basis in its partnership interest of 0.