Ask Question
26 August, 01:58

Perry Partnership distributed cash of $15,000 and a parcel of land in a liquidating distribution to Gupta, a partner. The land had a fair market value of $50,000 and an inside basis of $52,000 at the time of the distribution. Gupta's outside basis in Perry just prior to the distribution was $70,000. What is Gupta's resulting basis in the land?

a. $50,000

b. $55,000

c. $53,000

d. $52,000

+5
Answers (1)
  1. 26 August, 03:47
    0
    option (b) $55,000

    Explanation:

    Data provided in the question:

    Cash distributed = $15,000

    Fair market value of the land = $50,000

    Inside basis at the time of the distribution = $52,000

    Gupta's outside basis = $70,000

    Now,

    Gupta's Outside basis = Cash + Basis in land

    or

    $70,000 = $15,000 + Basis in land

    or

    Basis in land = $70,000 - $15,000

    or

    Basis in land = $55,000

    Hence,

    The answer is option (b) $55,000
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Perry Partnership distributed cash of $15,000 and a parcel of land in a liquidating distribution to Gupta, a partner. The land had a fair ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers