Bart Has a Partnership Interest with a $32,000 Basis

question 37

Multiple Choice

Bart has a partnership interest with a $32,000 basis. He receives a current distribution of $6,000 cash, unrealized receivables (FMV $9,000, basis $10,000) , inventory (FMV $8,000, basis $4,000) , investment land (FMV $7,000, basis $4,000) , and building (FMV $20,000, basis $8,000) . No depreciation recapture applies with respect to the building. The partners' relative interests in the Sec. 751 assets do not change as a result of the current distribution. Bart's basis in the building is

• A) $4,000.
• B) $3,000.
• C) $8,000.
• D) $6,000.

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Definitions:

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two or more goods given a set of inputs.

Outward Shift

A movement of the supply or demand curve in an economic diagram indicating an increase in supply or demand, leading to changes in price and quantity.

Consumption Level

The total amount of goods and services that an individual or group consumes over a specific period.

Technological Improvement

Innovations and advancements in technology that enhance productivity, efficiency, and quality of goods and services.