The ABC partnership has four partners. Each partner's adjusted basis in the partnership interest owned by that partner was $175,000 on the first day of the current year. The partnership reported net income for the current year of $160,000 (no separately stated items to take into account). The partnership distributed pro rata to each partner $15,000 in cash plus identical shares of stock that each had a fair market value of $25,000 and a basis to the partnership of $12,000. How much is includible in each partner's gross income for the year as the result of the distribution? a. $40,000 b. $15,000 c. $25,000 d. $28,000
The ABC partnership has four partners. Each partner's adjusted basis in the partnership interest owned by that partner was $175,000 on the first day of the current year. The partnership reported net income for the current year of $160,000 (no separately stated items to take into account). The partnership distributed pro rata to each partner $15,000 in cash plus identical shares of stock that each had a fair market value of $25,000 and a basis to the partnership of $12,000. How much is includible in each partner's gross income for the year as the result of the distribution? a. $40,000 b. $15,000 c. $25,000 d. $28,000
Chapter21: Partnerships
Section: Chapter Questions
Problem 22CE
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Transcribed Image Text:The ABC partnership has four partners. Each partner's adjusted basis in the
partnership interest owned by that partner was $175,000 on the first day of
the current year. The partnership reported net income for the current year of
$160,000 (no separately stated items to take into account). The partnership
distributed pro rata to each partner $15,000 in cash plus identical shares of
stock that each had a fair market value of $25,000 and a basis to the
partnership of $12,000. How much is includible in each partner's gross income
for the year as the result of the distribution?
a. $40,000
b. $15,000
c. $25,000
d. $28,000
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