Ruth owns a 25% capital and profits interest in the calendar-year RDV Partnership
Question # 00123001
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Updated on: 10/24/2015 01:22 AM Due on: 10/24/2015
Ruth owns a 25% capital and profits interest in the calendar-year RDV Partnership. Her adjusted basis for her partnership interest on July 1 of the current year is $170,000. On that date, she receives a proportionate nonliquidating distribution of the following assets.
| Partnership's Basis in Asset | Asset's Fair Market Value | |
| Cash | $90,000 | $90,000 |
| Inventory | $110,000 | $140,000 |
| Land (held for investment) | $100,000 | $160,000 |
(I) Calculate Ruth's recognized gain or loss on the distribution, if any.
(II) Calculate Ruth's basis in the inventory received.
(III) Calculate Ruth's basis in land received. The land is a capital asset.
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Rating:
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Solution: Ruth owns a 25% capital and profits interest in the calendar-year RDV Partnership