Jacob Is a Partner in the JB Partnership with a Basis

question 40

Multiple Choice

Jacob is a partner in the JB Partnership with a basis in his partnership interest is $35,000.He receives a nonliquidating distribution of $25,000 cash and real property with a partnership basis of $18,000 and a fair market value of $30,000.How much taxable gain will Jacob recognize on the distribution?

• A)0
• B)$8,000
• C)$20,000
• D)$43,000

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Definitions:

Journal Entries

The records that document every financial transaction in the accounting system in chronological order.

Job Cost Sheets

A document or record that tracks all the costs associated with a specific job or project, including materials, labor, and overhead costs.

Indirect Materials

Materials used in the production process that are not directly traceable to the final product, such as lubricants and cleaning supplies for machinery.

Indirect Labor

Labor costs associated with the production process that cannot be directly traced to specific products or services, such as maintenance or supervision.