Michael Was a Partner in the M&M Partnership Until November

question 51

Multiple Choice

Michael was a partner in the M&M Partnership until November 1, when he received a liquidating distribution of investment property with a tax basis of $28,000 and a fair market value of $75,000.Prior to this distribution, his tax basis in his partnership interest was $40,000.What is his tax basis in the property received from the partnership?

• A)$75,000
• B)$40,000
• C)$28,000
• D)0

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Definitions:

Cash-Out Combinations

Financial arrangements, often in mergers and acquisitions, where shareholders receive cash instead of shares of the new or acquiring company.

Publicly Held Corporation

A corporation whose shares are publicly traded on a stock exchange, allowing for broad ownership by investors.

Dissenting Shareholders

Shareholders who do not agree with a corporate action and are allowed certain rights, such as selling their shares back to the company under specific conditions.

Damage Award

A monetary compensation ordered by a court to be paid to a person as reimbursement for harm or injury suffered.