Bev and Cabel Each Have 50% Ownership in Finch Partnership

question 22

Multiple Choice

Bev and Cabel each have 50% ownership in Finch Partnership. Bev's partnership interest has a basis of $225,000. Finch's taxable income for the current year is $100,000, and it distributes $180,000 to each partner. Bev's partnership interest basis at the end of the year is:

• A)$0.
• B)$45,000.
• C)$95,000.
• D)$100,000.
• E)None of the above.

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Definitions:

Catharsis

The process of releasing, and thereby providing relief from, strong or repressed emotions, often through art, drama, or music.

Reaction Formation

A psychological defense mechanism where an individual expresses feelings or behaviors that are the opposite of their true feelings.

Personality

An individual's characteristic pattern of thinking, feeling, and acting, which differs from one person to another.

Latin

A classical language belonging to the Italic branch of the Indo-European languages, historically used in the Roman Empire.