Bonbon Receives a Current Distribution Consisting of $5,000 Cash Plus

question 14

Multiple Choice

Bonbon receives a current distribution consisting of $5,000 cash plus other property with an adjusted basis to the partnership of $6,000 and a fair market value on the date of the distribution of $12,000.Bonbon has a 10 percent interest in the partnership and her basis in her partnership interest immediately prior to the distribution is $15,000.What is Bonbon's basis in the non-cash property received in the current distribution?

• A)$4,000
• B)$5,000
• C)$6,000
• D)$11,000
• E)$12,000

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Definitions:

Variable Costs

Expenses that change in proportion to the activity or volume of a business.

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The value and strength of a brand that is determined by consumer perception, recognition, and loyalty.

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An approach in business where a company takes into account the interests and concerns of all parties affected by its operations, including customers, employees, shareholders, and the community.

Secondary Stakeholders

Individuals or groups indirectly affected by a project's outcome or business operations, unlike primary stakeholders who are directly impacted.