Manny Has an Outside Basis of $180,000 in the MNO

question 7

Multiple Choice

Manny has an outside basis of $180,000 in the MNO Partnership as of December 31 of the current year.On that date the partnership liquidates and distributes to Manny a proportionate distribution of $130,000 cash and inventory with an inside basis to the partnership of $20,000 and a fair market value of $30,000.In addition, Manny receives a desk which has an inside basis and fair market value of $1,400 and $3,600, respectively.None of the distribution is for partnership goodwill.How much gain or loss will Manny recognize on the distribution, and what basis will he take in the desk?

• A)$28,600 loss; $1,400 basis.
• B)$26,400 loss; $3,600 basis.
• C)$16,400 loss; $3,600 basis.
• D)$0 loss; $30,000 basis.
• E)None of the above.

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Definitions:

Metaphysical Viewpoint

A perspective that deals with questions of existence, the nature and structure of the universe, reality, and the theory of knowledge.

Teleological Metaphysics

The branch of metaphysics that deals with the study of purpose, design, and goals within the universe, often involving the idea that natural processes aim towards certain ends.

Mechanistic Metaphysics

A philosophical viewpoint that regards natural processes as mechanically determined and capable of explanation by laws of physics and chemistry.

Non-teleological

Pertaining to theories or viewpoints that reject the existence of ultimate purposes or ends in natural phenomena or human activities.