In a proportionate nonliquidating distribution of a capital asset,the partner recognizes gain to the extent the fair market value of the asset exceeds the partnership's basis in the asset.

Question

Quizplus · Accepted Answer

In a nonliquidating distribution, the partner does not recognize gain or loss. The partner takes a carryover basis in the distributed asset, which is the partnership's basis in the asset, not its fair market value.

In a Proportionate Nonliquidating Distribution of a Capital Asset,the Partner