Partnership Records Show R Is a 50 Percent Partner

question 12

Multiple Choice

Partnership records show: $\begin{array}{ll}&\text { Inside Basis }&FMV\\\text { Inventory }&\$12,000 & \$28,000 \\\text { Land }&48,000 & 70,000\\\text { Equipment }&32,000&42,000\\\text { Total assets }&\$92,000&\$140,000\end{array}$ R is a 50 percent partner.The equipment has $10,000 of § 1245 recapture potential.R sells her entire interest in the partnership for $70,000.Her basis in the partnership is $50,000.R's $20,000 recognized gain on the sale is

• A)All ordinary income
• B)All capital gain
• C)$8,000 of ordinary income and $12,000 of capital gain
• D)$13,000 of ordinary income and $7,000 of capital gain
• E)$24,000 of ordinary income and $4,000 of capital loss

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Definitions:

Bryophytes

A group of non-vascular plants including mosses, liverworts, and hornworts, characterized by their life cycle alternating between gametophyte and sporophyte generations.

True Wood

The hard, fibrous tissue found in the stems and roots of trees and other woody plants, made up primarily of cellulose, lignin, and hemicellulose.

Vascular Tissue

The plant tissue responsible for the transport of water and nutrients; it includes the xylem and phloem.

Seed Plants

Plants that reproduce and disseminate through seeds, as opposed to spores, including angiosperms and gymnosperms.