A finished ACC-681 Topic 4 basis provenance schedule example, tracing three bases to sections 732(b), 301(d) and 83, applying tacked and fresh holding periods, and netting to $36,200 of gain. Searches like "acc 681 topic 4 assignment example", "acc681 topic 4 sample" and "acc-681 topic 4 example" land here.
What a finished ACC-681 Topic 4 basis provenance schedule looks like
The finished schedule gives each asset one row and five columns: how it arrived, the rule that set its basis, the basis, the holding period and the result on sale, all figures illustrative. The land came out of a real estate partnership five months ago in liquidation of her interest; with a $70,000 outside basis and $10,000 of cash received, section 732(b) gives it a $60,000 basis, and section 735(b) adds the partnership's six years of holding. Sold for $96,000, it yields $36,000 of long-term gain. Shares her C corporation distributed seven months ago take their $40,000 value as basis under section 301(d), with a holding period that starts fresh, so a $43,000 sale gives $3,000 of short-term gain. Employer shares taxed as $30,000 of wages at vesting and sold for $27,200 give a $2,800 short-term loss.
How an ACC-681 Topic 4 example is structured
The schedule is organized by asset, then reconciled into one netting table. Its opening paragraph states the principle the rows share: basis and holding period are fixed when an asset arrives, by the regime that delivered it, and the sale only reads them. The land row works the liquidation first, confirming that $10,000 of cash below her outside basis triggered no gain under section 731(a) before carrying the remaining basis to the land. The corporate row notes the $25,000 of gain the corporation itself recognized under section 311(b) on distributing appreciated shares, and explains why none of the corporation's basis or holding period follows them. The employer row adds the wages already taxed, since the brokerage statement reports no basis at all. A netting table then combines short-term and long-term results. A closing note lists three plausible errors, each one priced.
Liquidation basis carried to the land
Her $70,000 outside basis less the $10,000 of cash leaves $60,000 for the land under section 732(b), not the partnership's $48,000 or the $90,000 value.
A holding period that tacks
Section 735(b) counts the partnership's six years toward her holding period, so land she has owned directly for five months produces long-term gain on sale.
Dividend shares starting from value
Because section 301(d) gives the distributed shares a $40,000 value basis, the corporation's $15,000 basis and nine-year holding period stay behind with the corporation.
Wages restored to the employer shares
The $30,000 taxed at vesting under section 83 is basis, and the regulations start the holding period on that date, so the sale is short-term.
Three errors priced in dollars
Zero basis on the employer shares overstates gain by $30,000, the partnership's inside basis adds $12,000, and the corporation's history misstates the dividend shares' gain and holding period.
Where marks go in ACC-681 Topic 4
Basis read off the wrong document is the loss this schedule sees most, and the brokerage statement is usually that document: reporting the employer shares at zero basis taxes $30,000 of wages a second time. Papers that give the land the partnership's own $48,000 basis apply the rule for current distributions in a liquidation, where section 732(b) substitutes her outside basis instead. Using the corporation's $15,000 basis and nine-year holding period for the dividend shares turns a $3,000 short-term gain into $28,000 of long-term gain. Treating the land as short-term because she owned it five months ignores the tacking in section 735(b). Schedules that list the three sales without the regime behind each basis give a reader no way to check them. Netting before each result's character is fixed blends amounts the table has to keep apart.
Get an ACC-681 Topic 4 example written to your instructions
Send the ACC-681 Topic 4 instructions, your classroom rubric and the property facts in your case. We write a custom example to them, with each asset's basis traced to the rule that set it, holding periods tacked or started fresh, gain or loss characterized and netted, and likely errors priced, back in 24 to 48 hours. The first is free.
ACC-681 Topic 4 questions, answered
Why does the liquidation give the land more basis than the partnership had?
Because in a liquidating distribution section 732(b) gives the distributed property whatever outside basis the partner has left after cash, so her investment in the partnership is preserved in the assets she walks away with. Here that is $60,000 against the partnership's $48,000. If several assets were distributed, section 732(c) would allocate that basis among them.
Why does the corporation's holding period not carry over?
Tacking follows basis. When property's basis is determined by reference to another holder's basis, the holding periods join; when basis is simply the property's value on receipt, as section 301(d) provides for a distribution, the holding period starts on receipt. The corporation had held the shares for nine years, and none of that time reaches the shareholder.
Why would the brokerage statement show no basis?
For shares received as compensation, the broker often knows only what the employee paid for them, which here was nothing, while the $30,000 taxed at vesting appears on the wage statement instead. The regulations under section 83 treat that amount as basis. A return that accepts the statement's figure reports the same income twice, once as wages and again as gain.