The WXYZ partnership has five partners. Each partner's adjusted basis in the partnership interest owned by that partner was $80,000 on the first day of last year. The partnership reported net income for last year of $100,000 (no separately stated items to take into account). The partnership distributed pro rata to each partner $15,000 in cash plus identical pieces of equipment that each had a fair market value of $20,000 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. $35,000 b. $20,000 c. $15,000 d. $23,000 e. $0
The WXYZ partnership has five partners. Each partner's adjusted basis in the partnership interest owned by that partner was $80,000 on the first day of last year. The partnership reported net income for last year of $100,000 (no separately stated items to take into account). The partnership distributed pro rata to each partner $15,000 in cash plus identical pieces of equipment that each had a fair market value of $20,000 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. $35,000 b. $20,000 c. $15,000 d. $23,000 e. $0
Chapter21: Partnerships
Section: Chapter Questions
Problem 22CE
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Transcribed Image Text:The WXYZ partnership has five partners. Each partner's adjusted basis in
the partnership interest owned by that partner was $80,000 on the first day of
last year. The partnership reported net income for last year of $100,000 (no
separately stated items to take into account). The partnership distributed pro
rata to each partner $15,000 in cash plus identical pieces of equipment that
each had a fair market value of $20,000 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. $35,000
b. $20,000
c. $15,000
d. $23,000
e. $0
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