Barbara Receives a Current Distribution Consisting of $2,000 Cash Plus

question 30

Multiple Choice

Barbara receives a current distribution consisting of $2,000 cash plus other property with an adjusted basis to the partnership of $2,300 and a fair market value on the date of the distribution of $7,000. Barbara has a 10 percent interest in the partnership and her basis in her partnership interest, immediately prior to the distribution, is $5,000. What is Barbara's basis in the noncash property received in the current distribution?

• A)$2,000
• B)$2,300
• C)$3,000
• D)$7,000
• E)None of these

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Definitions:

Private Funds

Financial resources raised from non-governmental sources, used for investment or other private enterprise.

Market Economy

An economic system where decisions regarding investment, production, and distribution are based on supply and demand, and prices of goods and services are determined in a free price system.

Surplus Goods

Items in excess of what is needed, often resulting in stockpiles or discounted sales.

Transportation Costs

are expenses involved in moving goods or people from one location to another, including fuel, labor, and maintenance of vehicles.