The PW Partnership's Balance Sheet Includes the Following Assets Immediately

question 83

Multiple Choice

The PW Partnership's balance sheet includes the following assets immediately before it liquidates: In complete liquidation, PW distributes the cash to Pamela and the unrealized receivables to Wade (equal partners) . Pamela and Wade each have an outside basis in PW equal to $5,000. PW has no liabilities at the time of the liquidation. What is the amount and character of Pamela's recognized gain or loss?

• A) $0.
• B) $5,000 capital gain.
• C) $5,000 ordinary income.
• D) $2,500 capital gain and $2,500 ordinary income.

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Definitions:

Dambisa Moyo

An international economist and author known for her works on global economic issues and development in emerging economies.

Foreign Aid

Economic, technical, or military assistance given by one country to another for purposes of relief and rehabilitation, for economic stabilization, or for mutual defense.

Aid Agency

An organization, often part of the government or non-profit sector, dedicated to providing financial or logistical support to countries or individuals in need.

Multilateral Aid Agency

An organization that provides support or resources to developing countries, funded by multiple government or institutional donors.