Lauren's basis in Driftwood Partnership is $635,000. Driftwood distributes all the land to Lauren in complete liquidation of her partnership interest. The partnership reports the following balance sheet just before the distribution: Tax Basis FMV Assets Cash Stock (investment) Land $ 695,000 935,000 250,000 $ 1,880,000 $ 395,000 395,000 395,000 $ 1,185,000 Totals Liabilities and capital Capital-Esteban Capital-Kylie Capital-Lauren Totals 635,000 635,000 635,000 $ 1,905,000 b. If Driftwood does not have a $754 election in place, what is the amount of the special basis adjustment, If any? Special basis adjustment

Lauren's basis in Driftwood Partnership is $635,000. Driftwood distributes all the land to Lauren in complete liquidation of her partnership interest. The partnership reports the following balance sheet just before the distribution: Tax Basis FMV Assets Cash Stock (investment) Land $ 695,000 935,000 250,000 $ 1,880,000 $ 395,000 395,000 395,000 $ 1,185,000 Totals Liabilities and capital Capital-Esteban Capital-Kylie Capital-Lauren Totals 635,000 635,000 635,000 $ 1,905,000 b. If Driftwood does not have a $754 election in place, what is the amount of the special basis adjustment, If any? Special basis adjustment

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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