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

question 100

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 Wade'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:

Appreciative Inquiry

An approach to organizational change focusing on identifying what works well, analyzing why it works well, and then doing more of it.

Dreaming

A series of thoughts, images, or emotions occurring during sleep, particularly during REM sleep, reflecting complex cognitive processes.

Action Research

A participative and collaborative method of inquiry that involves a cycle of reflection, planning, action, and evaluation to solve problems or improve practices within communities or organizations.

Problem-focused

An approach aimed directly at eliminating or managing the source of a problem, as opposed to strategies that manage the symptoms or consequences.