Tyson Is a 25percent Partner in the KT Partnership

question 57

Multiple Choice

Tyson is a 25percent partner in the KT Partnership. On January 1, KT makes a proportionate, liquidating distribution of $16,000 cash and land with a $16,000 fair value (inside basis $8,000) to Tyson. KT has no liabilities at the date of the distribution. Tyson's basis in his KT Partnership interest is $20,000. What is the amount and character of Tyson's gain or loss from the distribution?

• A)$0.
• B)$4,000 capital gain.
• C)$12,000 ordinary income.
• D)$12,000 capital gain.

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Definitions:

Work Force

The total number of people employed or available for employment in a specific community, region, or country, including both the employed and those seeking employment.

Collective Bargaining

The negotiation process between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, and other aspects of workers' compensation and rights.

Going on Strike

A form of protest or labor action where employees stop working to press for better working conditions, wages, or benefits from their employers.

Withhold Labor

The act of refusing to work, typically as a form of protest or to secure better working conditions or wages.