Identify Which of the Following Statements Is True

question 2

Multiple Choice

Identify which of the following statements is true.

• A)On December 31 of the current year, Max Curcio's adjusted basis for his interest in the Maduro & Motta Partnership is $36,000. Maduro & Motta distributes cash of $6,000 and a parcel of land held as an investment to Curcio in liquidation of his entire interest in the partnership. The land has an adjusted basis of $18,000 to the partnership and an FMV of $42,000. Curcio's basis in the land is $18,000.
• B)Jake has a basis in his partnership interest of $40,000 before receiving a liquidating distribution of $5,000 cash, inventory with a basis of $4,000 and an FMV of $5,000, and land with a basis of $3,000 and an FMV of $6,000. Jake will receive no further distributions. He can recognize a loss of $28,000 at the time the liquidating distribution is received.
• C)A partner's holding period for a partnership interest is never considered when determining the holding period for property distributed in a liquidating distribution.
• D)All of the above are false.

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Definitions:

Analysis

The process of examining components or structure of a subject to understand more about it and draw conclusions.

Present Value Calculations

The process of determining the current value of a future sum of money or stream of cash flows, taking into account a specific rate of return or discount rate.

Natural Resources

Raw materials and resources found in the environment that are used for economic gain, such as minerals, forests, water, and fertile land.

Net Benefits

The difference between the total benefits and total costs associated with an economic decision or project.