Question

Travis and Alix Weber are equal partners in the Tralix Partnership, which does not have a §754 election in place. Alix sells one-half of her interest (25 percent) to Michael Tomei for $39,500 cash. Just before the sale, Alix’s basis in her entire partnership interest is $79,750, including her $39,500 share of the partnership liabilities. Tralix’s assets on the sale date are as follows:

		Tax Basis		FMV
Cash	$	48,550		$	48,550
Inventory		39,500			128,000
Land held for investment		84,750			53,800
Totals	$	172,800		$	230,350

b. What is Alix’s basis in her remaining partnership interest?

Basis:

c. What is Michael’s basis in his partnership interest?

Basis:

Answer 1

Ans:

B). Alix basis in her remaining partnership interest=

Total basis in Partnership interest =$ 75,000

Alix remaining basis = 1/2 of $75,000 ( since both partner are equal therefore ratio is equal i.e. 1/2)

= $37,500

Therefore Alix's basis in her remaining partnership interest is $37,500

C). Its given that Michael has an outstanding basis in his 25% interest in Tralix's equals to $39,500 Plus his 25% share of tralix debt of $750 for a total basis of $40,250