Before Receiving a Liquidating Distribution, Kathy's Basis in Her Interest

question 89

Multiple Choice

Before receiving a liquidating distribution, Kathy's basis in her interest in the KLM Partnership is $30,000. The distribution consists of $5,000 in money, inventory having a $1,000 basis to the partnership and a $2,000 FMV, and two parcels of undeveloped land (not held as inventory) having basis of $3,000 and $9,000 to the partnership with FMVs of $5,000 and $12,000, respectively. What is Kathy's basis in each parcel of land?

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Definitions:

Sensorimotor

Refers to a developmental stage in infants where they learn to interact with the world through physical movements and sensory experiences.

Concrete Operational

A stage in Piaget's theory of cognitive development, where children aged around 7-12 years gain the ability to think logically about concrete events.

Concrete Operations

a stage in Piaget's theory of cognitive development, where children aged 7 to 12 years become capable of logical thought processes but are not yet able to handle abstract reasoning.

Conservation Tasks

Cognitive tests used in developmental psychology that measure a child's ability to understand that certain properties of objects can remain the same despite changes in the object's form or appearance.