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28 January, 19:55

Randolph is a 30% partner in the RD Partnership. On January 1, RD distributes $26,000 cash to Randolph in complete liquidation of his interest. RD has only capital assets and no liabilities at the date of the distribution. Randolph's basis in his RD partnership interest is $37,000. What is the amount and character of Randolph's gain or loss on the distribution?

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  1. 28 January, 20:03
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    Therefore, The amount and character of Randolph's gain or loss on the distribution is $11,000.

    Explanation:

    Randolph recognized capital gain or loss on distribution

    = $37,000 - $26,000

    = $11,000

    This is a loss since he received only cash in the distribution and the amount is less than his basis in his partnership interest.

    Therefore, The amount and character of Randolph's gain or loss on the distribution is $11,000.
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