In Complete Liquidation PW Distributes the Cash to Pamela and the Unrealized

question 22

Multiple Choice

In complete liquidation PW distributes the cash to Pamela and the unrealized receivables to Wade(equal partners) . Pamela and Wade each have an outside basis in PW equal to $5,000. PW has no liabilities at the time of the liquidation. What is the amount and character of Wade's recognized gain or loss?

• A) $2,500 capital gain and $2,500 ordinary income.
• B) $5,000 ordinary income.
• C) $5,000 capital gain.
• D) $0.

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Definitions:

Span of Control

Refers to the number of subordinates or tasks directly supervised or overseen by one manager or leader.

Centralization

The concentration of control, decision-making, or authority in a particular location or among a specific group of individuals.

Organic

Relating to or derived from living matter; in business or organization contexts, it often describes processes or structures that are flexible and naturally developing.

Mechanistic

Referring to a view or system that regards processes or organizations as being similar to a machine, with each part having a specific role that contributes to the overall operation.