Ask Question
19 September, 14:03

Jenny has a $54,000 basis in her 50 percent partnership interest in the JM Partnership before receiving any distributions. This year JM makes a proportionate operating distribution to Jenny of a parcel of land with an $80,000 fair value and a $64,000 basis to JM. The land is encumbered with a $30,000 mortgage (JM's only liability). What is Jenny's basis in the land and her remaining basis in JM after the distribution?

+4
Answers (1)
  1. 19 September, 14:22
    0
    Land Basis = $64,000

    JM Basis = $5,000

    Explanation:

    As per the data given in the question,

    Outside basis = $50,000

    Carryover basis of land = $64,000

    Land encumbered with mortgage = $30,000

    Partnership interest = 50%

    So her basis increased by = $30,000 * 50%

    = $15,000

    Total increased basis = $54,000 + $15,000

    =$69,000

    As per the following formula,

    Basis left in partnership interest = Total basis - Carryover basis of land

    = $69,000 - $64,000

    = $5,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Jenny has a $54,000 basis in her 50 percent partnership interest in the JM Partnership before receiving any distributions. This year JM ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers