Kelly is a 20% partner in KMJ, LLC. She receive a current distribution of $200 cash that reduces her interest in the partnership from 20% to 10%. Kelly’s outside basis in her partnership interest before the distribution is $100, which includes an allocation of $50 of partnership debt. After the distribution, her share of debt will be reduced to $25. What are the tax consequences of the distribution to Kelly?

Kelly is a 20% partner in KMJ, LLC. She receive a current distribution of $200 cash that reduces her interest in the partnership from 20% to 10%. Kelly’s outside basis in her partnership interest before the distribution is $100, which includes an allocation of $50 of partnership debt. After the distribution, her share of debt will be reduced to $25. What are the tax consequences of the distribution to Kelly?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter21: Partnerships

Section: Chapter Questions

Problem 10BCRQ

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