Question
What are §751 hot assets?
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Answer
Unrealized receivables and inventory.
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Question
What is the basis adjustment order for a partner during the year?
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Answer
Contributions, income, liability increases, then distributions and losses.
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Question
Why can a liquidating distribution create a loss when a current distribution cannot?
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Answer
It terminates the partnership interest and fully applies outside basis.
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Question
How is property received in a nonliquidating distribution taxed to the partner?
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Answer
It takes a carryover basis, limited by remaining outside basis.
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