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3 December, 08:39

Marvel has an adjusted basis in a partnership interest of $25,000 before receiving a current distribution of $4,000 cash, inventory with an adjusted basis of $6,000 and a fair market value of $9,000, and land with a fair market value of $7,000 and an adjusted basis of $8,000. section 754 does not apply. what is marvel's basis in the partnership interest after the distribution?

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  1. 3 December, 08:52
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    Answer: $7,000

    Explanation:

    Using the cost basis and adjusted basis of inventory and land respectively, Marvel's basis in the partnership interest after distribution is given by;

    Marvel's beginning basis = $25,000

    Cash = ($4,000)

    Inventory = ($6,000)

    Land = ($8000)

    Marvel's Beginning basis - (cash + inventory + land)

    $25,000 - ($4000+$6,000+$8,000)

    $25,000 - $17,000

    Marvel's basis in the partnership interest after the distribution is $7,000
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