Fletcher Jacobson

Mathematics

18 June, 04:52

59. Gil's outside basis in his interest in the GO Partnership is $100,000. In a pro - portionate nonliquidating distribution, the partnership distributes to him

cash of $30,000, inventory (fair market value of $40,000, basis to the partnership of

$20,000), and land (fair market value of $90,000, basis to the partnership of

$40,000). The partnership continues in existence.

a. Does the partnership recognize any gain or loss as a result of this distribution? Explain.

b. Does Gil recognize any gain or loss as a result of this distribution? Explain.

c. Calculate Gil's basis in the land, in the inventory, and in his partnership interest immediately following the distribution.