Randolph Is a 30percent Partner in the RD Partnership

question 84

Multiple Choice

Randolph is a 30percent partner in the RD Partnership. On January 1, RD distributes $23,000 cash and inventory with a fair value of $30,000 (inside basis of $15,000) to Randolph in complete liquidation of his interest. RD has no liabilities at the date of the distribution. Randolph's basis in his RD Partnership interest is $41,200. What is the amount and character of Randolph's gain or loss on the distribution?

• A)$0 gain or loss.
• B)$11,800 capital gain.
• C)$11,800 capital loss.
• D)$3,200 capital loss.

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Definitions:

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A court-ordered resolution based on fairness to resolve a legal issue, often when monetary damages are insufficient.

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