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Basis in a noncash distribution

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20. Wendy receives a proportionate non-liquidating distribution from the WXY Partnership. The distribution consists of $75,000 cash and property with an adjusted basis to the partnership of $20,000 and a fair market value of $25,000. Immediately before the distribution, Wendy's adjusted basis for her partnership interest is $90,000. Wendy's basis in the non-cash property received is:

a. $0.
b. $15,000.
c. $20,000.
d. $25,000.
e. None of the above.

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Your answer is B.

Basis in the partnership is first reduced to $15,000 by the ...

Solution Summary

WXY partnerships are discussed for proportionate non-liquidating distribution.