Daniela is a 25% partner in the JRD Partnership. On January 1, JRD makes a proportionate...

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Daniela is a 25% partner in the JRD Partnership. On January 1, JRD makes a proportionate liquidating distribution of $15,000

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Answer 1

Answer #1

Daniela's basis in the partnership is $21,000.

Distribution to Daniela from the partnership = $15,000 cash + $5,000 (inventory at inside basis) = $20,000

Since Daniela's basis in the partnership is greater than the distribution received by her, she will recognize a capital loss on the distribution.

Capital loss to be recognized = $21,000 basis in partnership - $20,000 Distribution received = $1,000

Basis in the inventory received will be the carryover basis that is $5,000.

Therefore, the answer is that Daniels will recognize $1,000 of capital loss and her basis of the inventory is $5,000.

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Answer 2

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Daniela is a 25% partner in the JRD Partnership. On January 1, JRD makes a proportionate...

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