Kathy is a 25 percent partner in the KDP Partnership and receives a parcel of land with a fair value of $160,000 (inside basis of $120,000) in complete liquidation of her partnership interest. Kathy's outside basis immediately before the distribution is $210,000. KDP currently has a §754 election in effect and has no hot assets or liabilities. What is KDP's special basis adjustment from the distribution?   Multiple Choice   $0.   $40,000 positive basis adjustment.   $90,000 positive basis adjustment.   $90,000 negative basis adjustment.

SWFT Individual Income Taxes
43rd Edition
ISBN:9780357391365
Author:YOUNG
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Chapter20: Corporations And Parterships
Section: Chapter Questions
Problem 33CE
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Kathy is a 25 percent partner in the KDP Partnership and receives a parcel of land with a fair value of $160,000 (inside basis of $120,000) in complete liquidation of her partnership interest. Kathy's outside basis immediately before the distribution is $210,000. KDP currently has a §754 election in effect and has no hot assets or liabilities. What is KDP's special basis adjustment from the distribution?

 

Multiple Choice
  •  

    $0.

  •  

    $40,000 positive basis adjustment.

  •  

    $90,000 positive basis adjustment.

  •  

    $90,000 negative basis adjustment.

     

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