Daniela Is a 25percent Partner in the JRD Partnership

question 45

Multiple Choice

Daniela is a 25percent partner in the JRD Partnership. On January 1, JRD makes a proportionate distribution of $23,000 cash, inventory with a $17,600 fair value (inside basis $8,800) , and accounts receivable with a fair value of $8,800 (inside basis of $13,200) to Daniela. JRD has no liabilities at the date of the distribution. Daniela's basis in her JRD Partnership interest is $26,400. What is Daniela's basis in the distributed inventory and accounts receivable?

• A)$1,700 inventory, $1,700 accounts receivable.
• B)$8,800 inventory, $13,200 accounts receivable.
• C)$0 inventory, $4,400 accounts receivable.
• D)$17,600 inventory, $8,800 accounts receivable.

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Definitions:

Demand Decrease

A reduction in the quantity of a product or service that consumers are willing and able to purchase at a given price.

Compounded Quarterly

Interest calculated and added to the principal four times a year.

Purchase Contract

A legal agreement between a buyer and a seller detailing the terms and conditions of a purchase.

Return

The profit or loss generated from an investment over a certain period of time.