The PW Partnership's Balance Sheet Includes the Following Assets Immediately

question 51

Multiple Choice

The PW partnership's balance sheet includes the following assets immediately before it liquidates:
In complete liquidation, PW distributes the cash to Pamela and the unrealized receivables to Wade (equal partners) . Pamela and Wade each have an outside basis in PW equal to $5,000. PW has no liabilities at the time of the liquidation. What is the amount and character of Pamela's recognized gain or loss?

• A) $0.
• B) $5,000 capital gain.
• C) $5,000 ordinary income.
• D) $2,500 capital gain and $2,500 ordinary income.

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Definitions:

Company Policies

Guidelines and rules established by an organization to govern its actions and employee behavior.

Private Blog

An online journal or informational website with restricted access, where content is shared with only a select group of people or requires a password to view.

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Open-door Policy

An organizational practice of making managers accessible to employees for open discussions and feedback.