Parker's basis in his PQ Partnership interest is $180,000. Parker receives a pro rata liquidating distribution consisting of $20,000 cash, land with a basis of $80,000 and a fair market value of $100,000, and his proportionate share of inventory with a basis of $60,000 to PQ and a fair market value of $75,000. Assume that PQ also liquidates.
Required:
a. How much gain or loss, if any, must Parker recognize as a result of the distribution?
b. What basis will Parker take in the inventory and land?
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Parker's basis in his PQ Partnership interest is $180,000. Parker receives a pro rata liquidating di...
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