Randolph is a 30 percent partner in the rd partnership. on january 1, rd distributes $16,000 cash and inventory with a fair value of $45,800 (inside basis of $22,900) to randolph in complete liquidation of his interest. rd has no liabilities at the date of the distribution. randolph's basis in his rd partnership interest is $41,050. what is the amount and character of randolph's gain or loss on the distribution?

Answer by Guest

In the RD Partnership, Randolph is a 30% partner. Randolph receives a cash payment of $26,000 from RD on January 1 in full liquidation of his investment.

What was Randolph's gain or loss on the distribution in terms of both amount and type?

Gain or loss $0 The basis for Randolph's investment in the RD partnership is $37,000.

What is the foundation of Randolph's distributed inventory and land?

$12,000 in land is the remaining base. The assets that Randolph has the most control over are $15,000 in cash, $10,000 in stock, and $12,000 in land. He begins by first allocating the distributed assets his outside basis in an amount equal to RD's basis.

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