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Michael's adjusted basis in the MW Partnership was $20,000 at the time he received the following nonliquidating distribution: Cash of $5,000 Equipment with an adjusted basis to the partnership of $8,000 and a fair market value of $10,000. What is the gain/loss Michael will recognize on this transaction

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The appropriate solution of the given question "$15,000". A further explanation is provided below.

According to the question, the values are:

Partnership,

= $20,000

Cash received,

= $5,000

Adjusted basis,

= $8,000

Fair market value,

= $10,000

hence,

→ The Michael's adjusted basis in the partnership will be:

= [tex]Basis \ in \ partnership- Cash \ received[/tex]

= [tex]20,000-5,000[/tex]

= [tex]15,000[/tex] ($)

Thus the above is the right answer.

Learn more about gain/loss values here:

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