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

question 87

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 Wade'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:

Invasion of Privacy

The infringement upon the personal space or information of an individual without consent, which can lead to legal action.

Unreasonable Intrusion

An invasive act that violates an individual's reasonable expectation of privacy and is not legally justifiable.

False Light

A privacy tort involving a misleading portrayal of an individual that is highly offensive or embarrassing, even if not defamatory.

Drug and Alcohol Testing

The process of checking an individual's body fluids or breath for the presence of drugs or alcohol, commonly used in employment and legal settings.