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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?

Respuesta :

fichoh

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

jepessoa

Answer:

$7,000

Explanation:

Marvel's basis after the distribution = $25,000 (original basis) - $4,000 (cash) - $6,000 (inventory basis) - $8,000 (land basis) = $7,000

To determine Marvel's basis, we must use the cost basis of the inventory, not the fair market value, as well as the basis of the land that he received.

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