How much danas distribution is considered ordinary income


The December 31, 2010, balance sheet of the DIP General Partnership is as follows:

Cash $180,000 $180,000
Receivables 0 60,000
Capital assets 90,000 120,000
Total $270,000 $360,000

Dana, capital $90,000 $120,000
Ivan, capital $90,000 120,000
Patty, capital $90,000 120,000
Total $270,000 $360,000

The partners share equally in partnership capital, income, gain, loss, deduction, and credit and capital is not a material income-producing factor. On December 31, 2010, general partner Dana receives a distribution of $120,000 cash in liquidation of her interest under 736. Danas outside basis for the partnership interest immediately before the distribution is $90,000. How much Danas distribution, if any, is considered ordinary income, return of capital and capital gain.

 

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Accounting Basics: How much danas distribution is considered ordinary income
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