Bart Has a Partnership Interest with a $32,000 Basis

question 1

Multiple Choice

Bart has a partnership interest with a $32,000 basis. He receives a current distribution of $6,000 cash, unrealized receivables (FMV $9,000, basis $10,000) , inventory (FMV $8,000, basis $4,000) , investment land (FMV $7,000, basis $4,000) , and building (FMV $20,000, basis $8,000) . No depreciation recapture applies with respect to the building. The partners' relative interests in the Sec. 751 assets do not change as a result of the current distribution. Bart's basis in the building is

• A)$3,000.
• B)$4,000.
• C)$6,000.
• D)$8,000.

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Definitions:

Equity Trust

A type of investment trust that holds equities or stocks in various companies as its primary investments.

Mortgage Trust

A type of investment trust that pools mortgage loans, offering investors shares in the income derived from mortgage interest payments.

Unit Trust

A form of collective investment constituted under a trust deed, similar to mutual funds in certain jurisdictions.

Global Fund

An investment fund that diversifies its portfolio by investing in securities from markets around the world.