Beth has an outside basis of $100,000 in the BBDE Partnership as of December 31 of the current year. On that date the partnership liquidates and distributes to Beth a proportionate distribution of $50,000 cash and inventory with an inside basis to the partnership of $10,000 and a fair market value of $16,000. In addition, Beth receives a computer (not inventory) which has an inside basis and fair market value of $0 and $3,000, respectively. None of the distribution is for partnership goodwill. How much gain or loss will Beth recognize on the distribution, and what basis will she take in the computer? O $40,000 loss; $0 basis. O $37,000 loss; $3,000 basis. O $0 gain or loss; $3,000 basis. $0 gain or loss; $40,000 basis. O None of the above.
Beth has an outside basis of $100,000 in the BBDE Partnership as of December 31 of the current year. On that date the partnership liquidates and distributes to Beth a proportionate distribution of $50,000 cash and inventory with an inside basis to the partnership of $10,000 and a fair market value of $16,000. In addition, Beth receives a computer (not inventory) which has an inside basis and fair market value of $0 and $3,000, respectively. None of the distribution is for partnership goodwill. How much gain or loss will Beth recognize on the distribution, and what basis will she take in the computer? O $40,000 loss; $0 basis. O $37,000 loss; $3,000 basis. O $0 gain or loss; $3,000 basis. $0 gain or loss; $40,000 basis. O None of the above.
Chapter21: Partnerships
Section: Chapter Questions
Problem 25CE
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Transcribed Image Text:Beth has an outside basis of $100,000 in the BBDE
Partnership as of December 31 of the current year. On
that date the partnership liquidates and distributes to
Beth a proportionate distribution of $50,000 cash and
inventory with an inside basis to the partnership of
$10,000 and a fair market value of $16,000. In addition,
Beth receives a computer (not inventory) which has an
inside basis and fair market value of $0 and $3,000,
respectively. None of the distribution is for partnership
goodwill. How much gain or loss will Beth recognize on
the distribution, and what basis will she take in the
computer?
O $40,000 loss; $0 basis.
O $37,000 loss; $3,000 basis.
O $0 gain or loss; $3,000 basis.
$0 gain or loss; $40,000 basis.
O None of the above.
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