Dan receives a proportionate nonliquidating distribution when the basis of his partnership interest is $30,000.The distribution consists of $10,000 in cash and property with an adjusted basis to the partnership of $24,000 and a fair market value of $26,500.Dan's basis in the noncash property is:
A)$26,500.
B)$24,000.
C)$20,000.
D)$10,000.
E)None of the above.

Question

Quizplus · Accepted Answer

Dan's basis in the noncash property is calculated by first reducing his partnership interest basis by the cash received ($30,000 - $10,000 = $20,000). The remaining basis of $20,000 is then assigned to the noncash property.

Dan Receives a Proportionate Nonliquidating Distribution When the Basis of His