Bella Partnership is an equal partnership in which each of the partners has a basis in his partnership interest of $10,000. Bella reports the following Balance Sheet:
a. Identify the “hot assets” if Toby decides to sell his partnership interest. Are these assets “hot” for purposes of distributions? b. If Bella distributes the land to Toby in complete liquidation of his partnership interest, what tax issues should be considered?
Tax Basis S 20,000 10,000 $ 30.000 Assets: FMV Inventory Land S 30,000 15,000 $ 45.000 Totals Liabilities and capital: Capital – Toby - Kaelin - Andrew 10,000 10,000 10,000 $ 30.000 Totals