1. Lara owns a 60 percent interest and Lance owns a 40 percent interest in LL Partnership a general partnership. On January 1 2011 Lara s adjusted basis in her partnership interest was $60000 and Lance s adjusted basis for his partnership interest was $10000. During 2011 LL Partnership had net taxable ordinary income of $50000 and the following separately stated items: qualified dividend income of $1000; taxable interest income of $2600; charitable contributions of $3000; and Section 179 expense of $20000. During 2011 partnership liabilities decreased by $25000 and there were no distributions made to either partner (assume liabilities are allocated in proportion to their percentage ownership of the partnership). Which of the following correctly states the basis in each partner s interest in LL Partnership on December 31 2011?A. Lara: $63360 and Lance: $12240.B. Lara: $65520 and Lance: $12680.C. Lara: $90360 and Lance: $30240.D. Lara: $92160 and Lance: $31440.2. Ten years ago Lisa acquired a one-third interest in Dee Associates a general partnership. In the current taxable year when Lisa s entire interest in the partnership was liquidated Dee Associates assets consisted of cash of $20000 and tangible property with an adjusted basis to the partnership of $46000 and a fair market value of $40000 on the date of distribution. Dee Associates had no liabilities. Lisa s adjusted basis in her one-third interest in the partnership was $22000. Lisa received cash of $20000 in complete liquidation of her entire interest. How much loss will Lisa recognize upon receipt of the liquidating distribution?A. 0.B. $2000 short-term capital loss.C. $2000 long-term capital loss.D. $2000 ordinary loss.3. Mark Pete and Mickey are equal partners in the 2MP Partnership a general partnership. On January 1 2011 Mark s adjusted basis in his partnership interest was $15000 Pete s adjusted basis in his partnership interest was $10000 and Mickey s adjusted basis in his partnership interest was $20000. The partnership had taxable income of $30000 in 2011 which was allocated equally among the partners. On December 31 2011 the partnership made a non-liquidating distribution of $25000 cash to Pete. How much income or gain did Pete recognize as a result of the distribution?A. 0.B. $5000.C. $15000.D. $25000.4. Ellen is a 25 percent partner in EFGH Partners a general partnership. Ellen s adjusted basis in her partnership interest is $18000. During the current taxable year Ellen received a non-liquidating distribution of land from EFGH Partners that had an adjusted basis to the partnership of $23000 and a fair market value of $45000 on the date of distribution. What is Ellen s basis in the land received in the non-liquidating distribution?A. 0.B. $18000.C. $23000.D. $45000.
