Ariel Receives from Her Partnership a Nonliquidating Distribution of $9,000 $$\begin{array} {| l | l| } \hline\text { Income recognized } & \text { Basis in land } \\\hline \$ 0 & \$ 20,000\\\hline\end{array}$$

question 5

Multiple Choice

Ariel receives from her partnership a nonliquidating distribution of $9,000 cash plus a parcel of land.The partnership had purchased the land five years ago for $20,000,but it is worth $28,000 at the time of the distribution.Ariel's predistribution basis is $17,000.How much income will Ariel recognize due to the distribution,and what is her basis in the land?

• A) \[\begin{array} {| l | l| }
• \hline\text { Income recognized } & \text { Basis in land } \\
• \hline \$ 0 & \$ 20,000\\\hline
• \end{array}\]
• B) \[\begin{array} {| l | l |}
• \hline\text { Income recognized } & \text { Basis in land } \\
• \hline \$ 0 & \$ 8,000\\\hline
• \end{array}\]
• C) \[\begin{array} {| l | l| }
• \hline\text { Income recognized } & \text { Basis in land } \\
• \hline \$ 12,000 & \$ 20,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} {| l | l| }
• \hline\text { Income recognized } & \text { Basis in land } \\
• \hline \$ 20,000 & 28,000 \\
• \hline
• \end{array}\]

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