Erin’s basis in her Kiybron Partnership interest is $3,300. Erin receives a distribution of $2,200 cash from Kiybron in complete liquidation of her in
Erin’s basis in her Kiybron Partnership interest is $3,300. Erin receives a distribution of $2,200 cash from Kiybron in complete liquidation of her interest. Kiybron is an equal partnership with the following balance sheet:
\r\nAssets: Tax Basis FMV
\r\nCash $ 2,200 $ 2,200
\r\nStock (investment) 1,100 2,200
\r\nLand 6,600 2,200
\r\nTotals $ 9,900 $ 6,600
\r\nLiabilities and capital:
\r\nCapital- Erin 3,300
\r\n- Carl 3,300
\r\n- Grace 3,300
\r\nTotals $ 9,900
\r\na. What are the amount and character of Erin’s recognized gain or loss? What is the effect on the partnership assets?
\r\nb. If Kiybron has a §754 election in place, what is the amount of the special basis adjustment?
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