Meritt Is a Partner in the McPherson Partnership

question 29

Multiple Choice

Meritt is a partner in the McPherson Partnership. At the close of the current year, Meritt's basis in the partnership is $25,000.
I.If the partnership distributes cash of $7,500 to Meritt, she must report the cash as income.
II.If the partnership distributes property with a basis of $12,000 and a fair market value of $15,000, Meritt must report $3,000 as income.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Prison Population

The total number of individuals incarcerated within a country's prison system at a given time.

Parchman Prison Farm

A Mississippi State Penitentiary, known for its harsh conditions and history of forced labor, reflecting broader themes of racial injustice in the penal system.

Cruel Working Conditions

Work environments that are harmful to employees' physical and mental health, often characterized by excessive hours, lack of safety measures, and abusive management.

Vagabond Laws

Laws historically used to arrest or control people who were homeless or wandering without employment; these laws were often applied in a racially discriminatory manner.