Franklin is a 50% partner in the Pierce Partnership and has an outside basis of $26,000 at the end of the year prior to any distributions. On December 31, Franklin receives a proportionate operating distribution of $16,000 cash and a parcel of land with a $24,000 fair value and an $18,000 basis to Pierce. What is Franklin’s basis in the distributed property?

William Henry has a 50% interest in Harrison Partnership. The basis for his partnership interest is $50,000. The partners share the economic risk of loss from liabilities in the same way they share partnership income and losses. William Henry receives a distribution of land that has an FMV of $40,000 and an adjusted basis of $30,000. The land is subject to a $25,000 liability, which William Henry assumes. His basis in the partnership interest following the land distribution is

On December 31, 2025, after receipt of his share of partnership income, Bill sold his interest in Clinton Partnership for $30,000 cash and relief of all liabilities. On that date, the adjusted basis of Bill’s partnership interest was $40,000, consisting of his capital account of $15,000 and his share of the partnership liabilities of $25,000. What is Bill’s gain or loss on the sale of his partnership interest?

At the formation of the Roosevelt Partnership, Theodore contributes land with a basis of $10,000 and an FMV of $30,000 and Edith contributes cash of $30,000. Theodore and Edith share profits and losses equally. When the land is sold two years later for $50,000, Theodore must recognize a gain of

On the first day of the partnership’s tax year, James purchases a 40% interest in Madison Partnership for $30,000 cash. The partnership has $40,000 in liabilities when James enters the partnership. Partners share the risk of loss from liabilities in the same way they share partnership income and losses. During 2025, the partnership incurs a $150,000 loss and a $20,000 increase in liabilities. How much of the loss can James report on his tax return for 2025?

The Harrison Partnership has a machine with an FMV of $25,000 and a basis of $20,000. The partnership has taken an $8,000 depreciation on the machine. The partnership has hot assets of

A new partner, Margaret, contributes cash and assumes a share of Taylor Partnership liabilities. Zachary’s interest in the partnership is reduced by 5% due to the admission of Margaret. The partnership liabilities at the time Margaret is admitted are $200,000 and the partners share the economic risk of loss in the same way they share partnership profits. Zachary’s basis in the partnership interest prior to Margaret’s admission is $5,000. Due to the admission of Margaret, partner Zachary has

On January 1, 2025 Andrew received a 60% interest in Jackson Partnership in exchange for $2,000 in cash and real property with a $3,000 basis. The real property was secured by a $2,000 mortgage. Jackson reported a $15,000 loss for its 2025 tax year. How much loss can Andrew deduct on his 2025 tax return?

Abraham has a basis in his Lincoln Partnership interest of $30,000. He receives a current distribution of $20,000 cash and investment land (FMV $7,000, basis $6,000). His basis in the land is

Grover transferred property with a basis of $200,000 and a fair market value of $310,000 to Cleveland Corporation in exchange for stock with a fair market value of $160,000 and $100,000 in cash in an exchange that qualifies for §351. Cleveland Corporation assumed a liability of $50,000 on the property. What is the gain realized by Grover?