Ten Years Ago, Latesha Acquired a One-Third Interest in Dana

question 53

Multiple Choice

Ten years ago, Latesha acquired a one-third interest in Dana Associates, a partnership, for $26,000 cash. This year, Latesha's entire interest in the partnership is liquidated when her basis is $24,000. Dana's assets consist of the following: cash, $20,000; inventory with a basis of $46,000 and an FMV of $40,000. Dana has no liabilities. Latesha receives the cash of $20,000 in liquidation of her entire interest. What is Latesha's recognized loss on the liquidation of her interest in Dana?

• A)$0
• B)$4,000 long-term capital loss
• C)$4,000 short-term capital loss and $2,000 ordinary loss
• D)$4,000 long-term capital loss and $2,000 ordinary loss

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Definitions:

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The process of providing constructive information about someone's performance or the act of maintaining contact after an initial interaction to ensure continued progress.

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The process of information flow from the lower levels of a hierarchy to the upper levels within an organization.

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