In each of the following independent cases in which the partnership owns no hot assets, indicate:
• Whether the partner recognizes gain or loss.
• Whether the partnership recognizes gain or loss.
• The partner’s adjusted basis for the property distributed.
• The partner’s outside basis in the partnership after the distribution.
a. Kim receives $20,000 of cash in partial liquidation of her interest in the partnership. Kim’s outside basis for her partnership interest immediately before the distribution is $3,000.
b. Kourtni receives $40,000 of cash and land with an inside basis to the partnership of $30,000 (value of $50,000) in partial liquidation of her interest. Kourtni’s outside basis for her partnership interest immediately before the distribution is $80,000.
c. Assume the same facts as in (b), except that Kourtni’s outside basis for her partnership interest immediately before the distribution is $60,000.
d. Klois receives $50,000 of cash and inventory with a basis of $30,000 and a fair market value of $50,000 in partial liquidation of her partnership interest. Her basis was $90,000 before the distribution. All partners received proportionate distributions.
