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Sam received a proportionate non-liquidating distribution when the basis on his partnership interest is 50000.
Sam received a proportionate non-liquidating distribution when the basis on his partnership interest is 50000. His distribution includes cash of 10000, inventory (FMV=14000;basis=120000) and equipment (FMV=20000;basis 15000). Sam's marginal tax rate is 25% and his long term capital gain tax is 15%. Assume he has sufficient long-term capital gains from the sale of stock. (proportionate non-liquidating distribution form)
a) how much gain or loss does Sam recognize?
b) What is Sam's tax liability/benefits on the distribution?
c) What is Sam's basis in the inventory?
d) What is Sam's basis in the equipment?
e) what is Sam's remaining basis in the partnership?
