Try out our new practice tests completely free!

# Federal Taxation

Bookmark

## Quiz 10 : Special Partnership Issues

The total bases of all distributed property in the partner's hands following a nonliquidating distribution is limited to
Free
Multiple Choice

A

Danielle has a basis in her partnership interest of $12,000.She receives a current distribution of$8,000 cash and equipment with a basis of $7,000.There is no potential gain under Sec.737.What is her basis in the equipment? Free Multiple Choice Answer: Answer: B Bart has a partnership interest with a$32,000 basis.He receives a current distribution of $6,000 cash,unrealized receivables (FMV$9,000,basis $10,000),inventory (FMV$8,000,basis $4,000),investment land (FMV$7,000,basis $4,000),and building (FMV$20,000,basis $8,000).No depreciation recapture applies with respect to the building.The partners' relative interests in the Sec.751 assets do not change as a result of the current distribution.Bart's basis in the building is Free Multiple Choice Answer: Answer: D John has a basis in his partnership interest of$30,000.He receives a current distribution of $6,000 cash,unrealized receivables (FMV$11,000,basis $10,000),inventory (FMV$8,000,basis $4,000),and investment land (FMV$7,000,basis $6,000).The partners' relative interest in the Sec.751 assets do not change as a result of the current distribution.His basis in the land is Multiple Choice Answer: A new partner,Gary,contributes cash and assumes a share of partnership liabilities.Diane's capital,profits,and loss interest in the partnership is reduced by 5% due to the admission of Gary.The Sec.751 rules do not apply.Partnership liabilities at the time Gary is admitted are$200,000,and all of the liabilities are recourse debts for which the partners share the economic risk of loss in the same way they share partnership profits.Diane's basis in the partnership interest prior to Gary's admission is $5,000.Due to the admission of Gary,partner Diane has Multiple Choice Answer: Tenika has a$10,000 basis in her interest in the TF Partnership and no remaining precontribution gain immediately before receiving a current distribution that consisted of $4,000 in money,plastic tubes held in inventory with a$3,000 basis to the partnership and an FMV of $3,375,and drip irrigation pipe held as inventory with a$6,000 basis to the partnership and an FMV of $5,000.What is Tenika's basis for the plastic tubes and drip irrigation pipe? Multiple Choice Answer: Mirabelle contributed land with a$5,000 basis and a $9,000 FMV to MS Partnership four years ago.This year the land is distributed to Sergio,another partner in the partnership.At the time of distribution,the land had a$12,000 FMV.What is the impact of the distribution on Mirabelle's partnership basis?
Multiple Choice
Identify which of the following statements is true.
Multiple Choice
Identify which of the following statements is true.
Multiple Choice
If a partnership asset with a deferred precontribution gain is distributed within seven years of acquisition in a nonliquidating distribution to a partner who did not contribute the asset,the precontribution gain must be recognized by the contributing partner.
True False
A partnership cannot recognize a gain or loss on a current distribution.
True False
If a distribution occurs within ________ years of the contribution date,in a nonliquidating distribution that does not qualify for Sec.751 treatment,the distribution event may trigger a precontribution gain or loss.
Multiple Choice
In a current distribution,the partner's basis in the partnership interest is reduced by the amount of money received and by the partnership's bases in the distributed property.
True False
Susan contributed land with a basis of $6,000 and an FMV of$10,000 to the SH Partnership two years ago to acquire her partnership interest.This year,the land is distributed to Harry when its FMV is $11,000.No other distributions have been made since Susan became a partner.When the land is distributed,the partnership's basis in the land immediately before distribution is increased by Multiple Choice Answer: Helmut contributed land with a basis of$5,000 and an FMV of $10,000 to the HG Partnership five years ago to acquire a 50% partnership interest.This year the land is distributed to another partner,Gail,when its FMV is$11,000.No other distributions have been made since Helmut became a partner.When the land is distributed to Gail,Helmut recognizes a gain of
Multiple Choice
A partner's holding period for property distributed as a current distribution begins on the date of distribution.
True False
Carlos has a basis in his partnership interest of $30,000.He receives a current distribution of$6,000 cash,unrealized receivables (FMV $11,000,basis$10,000),inventory (FMV $8,000,basis$4,000),land held as an investment (FMV $7,000,basis,$6,000),and building (FMV $21,000,basis$9,000).The partners' relative interests in the Sec.751 assets do not change as a result of the current distribution.Carlos's basis in the building is
Becky has a $24,000 basis in her partnership interest.She receives a current distribution of$4,000 cash,unrealized receivables with a basis of $12,000 and an FMV of$16,000,and land held as an investment with a basis of $3,000 and an FMV of$8,000.The partners' relative interests in the Sec.751 assets do not change as a result of the current distribution.The basis of her partnership interest following the distribution is
Tenika has a $10,000 basis in her interest in the TF Partnership and no remaining precontribution gain immediately before receiving a current distribution that consisted of$4,000 in money,plastic tubes held in inventory with a $3,000 basis to the partnership and an FMV of$3,375,and drip irrigation pipe held as inventory with a $6,000 basis to the partnership and an FMV of$5,000.What is the basis in Tenika's hands of the distributed property?
Mirabelle contributed land with a $5,000 basis and a$9,000 FMV to MS Partnership four years ago.This year the land is distributed to Sergio,another partner in the partnership.At the time of distribution,the land had a \$12,000 FMV.How much gain should Mirabelle and Sergio recognize?