On December 1, Antonio, a Member of a Three- Person

question 52

Multiple Choice

On December 1, Antonio, a member of a three- person partnership, purchases investment securities from the partnership for their $37,000 FMV. All partners share profits and losses equally. The securities were acquired by the partnership for $25,000 cash in March of the current year. What amount and character of gain will Antonio recognize because of this transaction?

• A) $4,000 ordinary income
• B) $12,000 ordinary income
• C) $0 gain
• D) $4,000 short- term capital gain

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Definitions:

Bravado

A display of boldness or swagger intended to impress or intimidate, often without the intention or ability to follow through.

Responsibility

The state or fact of being accountable or to blame for something, holding a duty to deal with tasks or care for someone.

Power Distant Cultures

Societies that maintain a significant level of inequality in power distribution among their members, often accepting hierarchical relationships as a cultural norm.

Hierarchy

A system or organization in which people or groups are ranked one above the other according to status or authority.