Parkers basis in his PQ Partnership interest is $180,000. Parker receives a pro rata liquidating...
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Parkers basis in his PQ Partnership interest is $180,000. Parker receives a pro rata liquidating distribution consisting of $20,000 cash, land with a basis of $80,000 and a fair market value of $100,000, and his proportionate share of inventory with a basis of $60,000 to PQ and a fair market value of $75,000. Assume that PQ also liquidates.
How much gain or loss, if any, must Parker recognize on the distribution?
What basis will Parker take in the inventory and land?
What are the tax consequences to the partnership?
Would your answer to part (a) or (b) change if this had been a current distribution? Explain.
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