The XYZ partnership has three equal partners. Each partner's adjusted basis in the partnership was $150,000 at the beginning of the year. The partnership earned net income of $90,000 for the year (no separately stated items). The partnership made pro rata distributions to each partner of $40,000 cash plus identical pieces of equipment with fair market value of $30,000 and partnership basis of $15,000. How much must each partner include in gross income for the year as a result of the distribution?
The XYZ partnership has three equal partners. Each partner's adjusted basis in the partnership was $150,000 at the beginning of the year. The partnership earned net income of $90,000 for the year (no separately stated items). The partnership made pro rata distributions to each partner of $40,000 cash plus identical pieces of equipment with fair market value of $30,000 and partnership basis of $15,000. How much must each partner include in gross income for the year as a result of the distribution?
Chapter21: Partnerships
Section: Chapter Questions
Problem 22CE
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Transcribed Image Text:The XYZ partnership has three equal partners. Each partner's
adjusted basis in the partnership was $150,000 at the beginning of
the year. The partnership earned net income of $90,000 for the year
(no separately stated items). The partnership made pro rata
distributions to each partner of $40,000 cash plus identical pieces of
equipment with fair market value of $30,000 and partnership basis
of $15,000. How much must each partner include in gross income for
the year as a result of the distribution?
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