Bart Has a Partnership Interest with a $32,000 Basis

question 1

Multiple Choice

Bart has a partnership interest with a $32,000 basis. He receives a current distribution of $6,000 cash, unrealized receivables (FMV $9,000, basis $10,000) , inventory (FMV $8,000, basis $4,000) , investment land (FMV $7,000, basis $4,000) , and building (FMV $20,000, basis $8,000) . No depreciation recapture applies with respect to the building. The partners' relative interests in the Sec. 751 assets do not change as a result of the current distribution. Bart's basis in the building is

• A)$3,000.
• B)$4,000.
• C)$6,000.
• D)$8,000.

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Definitions:

Fiscal Policy

Government policies related to taxation and spending that aim to influence the economy's overall activity.

Implementation

Implementation involves the process of putting a decision or plan into effect to achieve intended or expected results.

Permanent Income

Income that individuals expect to receive on average over the long term.

John Maynard Keynes

A British economist whose ideas fundamentally changed the theory and practice of macroeconomics and economic policies of governments, best known for Keynesian economics.