Riley Is a 50percent Partner in the RF Partnership and Has

question 32

Multiple Choice

Riley is a 50percent partner in the RF Partnership and has an outside basis of $56,000 at the end of the year prior to any distributions. On December 31, Riley receives a proportionate operating distribution of $6,000 cash and a parcel of land with a $14,000 fair value and an $8,000 basis to RF. What is Riley's basis in the distributed property?

• A)Cash $6,000, land $0.
• B)Cash $6,000, land $8,000.
• C)Cash $6,000, land $14,000.
• D)Cash $6,000, land $22,000.

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Definitions:

Material Fact

A fact that is significant or essential to the issue or matter at hand, which could influence a decision.

Duress

Unlawful pressure or coercion used on a person to compel them to perform an act against their will or judgment.

Breach

An act of breaking or failing to observe a law, agreement, or code of conduct, similar to a violation but often used in the context of contracts.

Contract

A legal agreement between two or more parties that creates obligations which are enforceable or recognized by law.