Using the number on the table below determine the tax treatment to the partner who...
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Accounting
Using the number on the table below determine the tax treatment to the partner who receives the distribution indicated, and then assuming the partnership has made a Section 754 election, determine the Section 734 adjustment, if any. If there is none write None or N/A
In EACH case the basis of the partners interest is $50,000 before the distribution.
The distribution consists of cash, a capital asset, and inventory as shown. If a column is blank then that type of asset was not distributed. The column for Liquidating indicates whether the distribution liquidated the partners interest or not.
| Situation | Cash Received | Basis of Capital Asset | Basis of Inventory | Liquidating? |
|
| A | 40,000 | 30,000 | None Distributed | No |
|
| B | 10,000 | 130,000 | None Distributed | Yes |
|
| C | 10,000 | None Distributed | 130,000 | No |
|
| D | 40,000 | None Distributed | 30,000 | Yes |
|
| E | -0- | 20,000 | 80,000 | No |
|
COMPLETE THIS TABLE
| Situation | Partner Gain/ | Basis to Cash | Basis to Property | Section 734 Adjustment, if any |
| A |
| $ |
|
|
| B |
| $ |
|
|
| C |
| $ |
|
|
| D |
| $ |
|
|
| E |
| 0 |
|
|
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