Randy Owns a One-Fourth Capital and Profits Interest in the Calendar-Year

Essay

Randy owns a one-fourth capital and profits interest in the calendar-year RUSR Partnership. His adjusted basis for his partnership interest was $200,000 when he received a proportionate nonliquidating distribution of the following assets:
Partnership's Basis in Asset Asset's Fair Market Value
Cash $120,000 $120,000
Inventory 60,000 90,000
a. Calculate Randy's recognized gain or loss on the distribution, if any. Explain.
b. Calculate Randy's basis in the inventory received.
c. Calculate Randy's basis for his partnership interest after the distribution.