[Anonymous]

property transfer to partnership but received some cash back or some property back., do partners recognize gains on the cash and its fmv of the property????

In liquidating distribution, what if partner’s basis is 10k, received cash 5k, and a car worth 7K.. what is the basis of the car?? 5K? what if non-liquidating?

please share your thoughts….thanks

[finne]

Haven't looked at REG in awhile, but I can answer this one for sure:

“In liquidating distribution, what if partner's basis is 10k, received cash 5k, and a car worth 7K.. what is the basis of the car?? 5K?”

For the liquidating distribution, the partner's basis should equal zero at the end and you usually don't recognize a gain/loss for the partner. The way that works is the 5,000 reduces the 10,000 basis to 5,000. Then equipment, like the car, is written up or down to make up the difference in basis. So here, the car worth 7,000 is written down to 5,000. This effectively defers the “gain” on the car until the partner sells it. Now say the partner's basis is 15,000. You'd still reduce it by 5,000 for the cash, leaving 10,000 basis remaining. In this case, you write up the car to 10,000 to make the difference.

REG - 85
AUD - 99
FAR - 89 - w/ NINJA Audio and Blitz
BEC - 91

Using Wiley - books and test bank - 6 months - all 4 first time

[finne]

Haven't looked at REG in awhile, but I can answer this one for sure:

“In liquidating distribution, what if partner's basis is 10k, received cash 5k, and a car worth 7K.. what is the basis of the car?? 5K?”

For the liquidating distribution, the partner's basis should equal zero at the end and you usually don't recognize a gain/loss for the partner. The way that works is the 5,000 reduces the 10,000 basis to 5,000. Then equipment, like the car, is written up or down to make up the difference in basis. So here, the car worth 7,000 is written down to 5,000. This effectively defers the “gain” on the car until the partner sells it. Now say the partner's basis is 15,000. You'd still reduce it by 5,000 for the cash, leaving 10,000 basis remaining. In this case, you write up the car to 10,000 to make the difference.

REG - 85
AUD - 99
FAR - 89 - w/ NINJA Audio and Blitz
BEC - 91

Using Wiley - books and test bank - 6 months - all 4 first time

[Author]

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