Tyson Is a 25 Percent Partner in the Kt Partnership.on
Tyson is a 25 percent partner in the KT Partnership.On January 1, KT makes a proportionate distribution of $16,000 cash, inventory with a $10,000 fair value (inside basis $4,000), land A with a fair value of $8,000 (inside basis of $12,000), and land B with a fair value of $6,000 (inside basis of $4,000)to Tyson.KT has no liabilities at the date of the distribution.Tyson's basis in his KT Partnership interest is $23,000.What is Tyson's basis in the distributed inventory, land A, and land B?
A)$10,000 inventory, $8,000 land A, $6,000 land B.
B)$4,000 inventory, $12,000 land A, $4,000 land B.
C)$0 inventory, $2,857 land A, $143 land B.
D)$4,000 inventory, $2,000 land A, $1,000 land B.
Brian is a 25 percent partner in the BC Partnership.On January 1, BC distributes $20,000 cash and land with a $16,000 fair value (inside basis $8,000)to Brian.BC has no liabilities at the date of the distribution.Brian's basis in his BC Partnership interest is $16,000.What is the amount and character of Brian's gain or loss on the distribution?
B)$4,000 capital gain.
C)$12,000 capital gain.
D)$20,000 capital gain.
Which of the following statements regarding disproportionate distributions is false?
A)A disproportionate distribution occurs when a partner receives more than his proportionate share of the partnership's hot assets.
B)A disproportionate distribution occurs when a partner receives less than his proportionate share of the partnership's hot assets.
C)The tax provisions related to disproportionate distributions attempt to preserve the partners' share of ordinary income potential.
D)Disproportionate distributions will only occur in liquidating distributions.
Which of the following statements regarding hot assets for purposes of disproportionate distributions is false?
A)Hot assets include unrealized receivables.
B)Hot assets include any inventory.
C)Hot assets include substantially appreciated inventory.
D)The definition of hot assets for distributions and sales of partnership interests differs.