The XYZ Partnership Owns the Following Assets on December 31

question 80

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.

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Definitions:

LFT

Liver function tests, which are blood tests used to assess the health and performance of the liver by measuring levels of liver enzymes, proteins, and bilirubin.

REBT

Rational Emotive Behavior Therapy (REBT) is a form of cognitive-behavioral therapy (CBT) that focuses on identifying irrational beliefs, challenging these beliefs, and replacing them with more rational and adaptive thoughts.

CBT

Cognitive Behavioral Therapy, a type of psychotherapy that helps individuals manage their problems by changing the way they think and behave.

Trigger

A stimulus that initiates a reaction or process, often used to describe events or conditions that lead to an undesired response, such as substance use.