Brian Is a 25% Partner in the BC Partnership

question 29

Multiple Choice

Brian is a 25% partner in the BC Partnership. On January 1, BC distributes $20,000 cash and land with a $16,000 fair value (inside basis $8,000) to Brian. BC has no liabilities at the date of the distribution. Brian's basis in his BC partnership interest is $16,000. What is the amount and character of Brian's gain or loss on the distribution?

• A) $0.
• B) $4,000 capital gain.
• C) $12,000 capital gain.
• D) $20,000 capital gain.

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Definitions:

Cyclohexanone

A six-carbon cyclic ketone with the molecular formula C6H10O, characterized by a ring structure with a ketone functional group.

Cyclopentanone

A cyclic ketone with the formula C5H8O, characterized by a five-membered ring structure; it's a common intermediate in the synthesis of more complex organic molecules.

Acetic Acid

A colorless liquid organic compound with the chemical formula CH3COOH, commonly known as the main component of vinegar after water.

Lithium Enolate

A reactive species derived from the deprotonation of a carbonyl compound by lithium, used in organic synthesis.