Helen’s basis in Haywood Partnership is $270,000. Haywood distributes all the land to Helen in complete liquidation of her partnership interest. The partnership reports the following Balance Sheet just before the distribution:
a. What is the amount and character of Helen’s recognized gain or loss? What is the effect on the partnership assets? b. If Haywood has a §754 election in place, what is the amount of the special basis adjustment?
Tax Basis $ 220,000 Assets: FMV Cash $ 220,000 Stock (investment) 480,000 220,000 Land 110,000 $ 810.000 220,000 $ 660.000 Totals Liabilities and capital: Capital - Charles - Esther - Helen S 270,000 270,000 270,000 $ 810.000 Totals