Identify Which of the Following Statements Is True

question 57

Multiple Choice

Identify which of the following statements is true.

• A) 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.
• B) 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.
• 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:

Oscillation Frequency

The rate at which an object or system oscillates, usually measured in cycles per second or Hertz (Hz).

Dampen

Synonymous with damp.

Suspension Components

Parts like springs, shock absorbers, and struts that are used to support a vehicle's frame, body, engine, and systems while driving over uneven surfaces.

Spring Shackles

Components used to attach leaf springs to the frame of a vehicle, allowing for movement and flexibility in the suspension system.