The XYZ Partnership Owns the Following Assets on December 31

question 87

Multiple Choice

The XYZ Partnership owns the following assets on December 31: A partner has a 20% interest with a basis of $6,000 in XYZ before receiving a liquidating distribution of $10,000 cash.XYZ Partnership has no liabilities.His recognized gain is

• A)$4,000 capital gain.
• B)$3,000 capital gain and $1,000 ordinary income.
• C)$3,000 ordinary income.
• D)$3,000 ordinary income and $1,000 capital gain.