Sabrina Has a $12,000 Basis in Her S&B Partnership Interest

question 74

Multiple Choice

Sabrina has a $12,000 basis in her S&B partnership interest.Sabrina receives a current cash distribution of $10,000 and equipment with a $5,000 basis (FMV $6,000) .What is Sabrina's recognized gain or loss?

• A)$0.
• B)$3,000.
• C)$4,000.
• D)$16,000.

---

Definitions:

Finance Company

A business that provides loans to individuals or other businesses and generates profit from the interest on these loans.

Conditional Sale

A sales agreement that includes conditions that must be met before the sale is final and the property is transferred to the buyer.

Ordinary Annuity

A series of equal payments made at regular intervals over a specified period of time.

Nominal Interest

The interest rate stated on a loan or investment agreement before the adjustment for inflation.