Vincent is a 50% partner in the TAV Partnership. He became a partner three years ago when he contributed land with a value of $60,000 and a basis of $30,000 (current value is $100,000). Tyler and Anita each contributed $30,000 cash for a 25% interest. Vincent’s basis in his partnership interest is currently $150,000; the other partners’ bases are each $75,000. The partnership has the following assets:
Basis FMV
Cash $200,000 200,000
Accounts receivable -0- 200,000
Marketable securities 70,000 100,000
Land 30,000 100,000
Total 300,000 600,000
In general terms, describe the tax result if TAV distributes a $50,000 interest in the land each to Tyler and Anita and $100,000 of accounts receivable to Vincent at the end of the current year.
Click here for the solution: Vincent is a 50% partner in the TAV Partnership
