Daniela Is a 25% Partner in the JRD Partnership

question 16

Multiple Choice

Daniela is a 25% partner in the JRD Partnership. On January 1, JRD makes a proportionate distribution of $16,000 cash, inventory with a $16,000 fair value (inside basis $8,000) , and accounts receivable with a fair value of $8,000 (inside basis of $12,000) to Daniela. JRD has no liabilities at the date of the distribution. Daniela's basis in her JRD partnership interest is $20,000. What is Daniela's basis in the distributed inventory and accounts receivable?

• A) $2,000 inventory, $2,000 accounts receivable.
• B) $8,000 inventory, $12,000 accounts receivable.
• C) $0 inventory, $4,000 accounts receivable.
• D) $16,000 inventory, $8,000 accounts receivable.

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Definitions:

Collective

A group or assembly of individuals that share common interests or goals, often working together towards a mutual objective.

Emotionally Charged

Referring to situations or topics that evoke strong feelings or emotional responses.

Organization

A structured group of people with a common goal, such as a business, government department, or charity.

Commercial Cleaning Business

A venture that provides cleaning services to commercial properties and establishments such as offices, schools, and hospitals.