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

question 82

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:

OASDI

Old-Age, Survivors, and Disability Insurance, a comprehensive federal benefits program that provides benefits to retired people, the disabled, and families of retired, disabled or deceased workers.

Hospital Insurance

A type of insurance coverage that pays for medical and surgical expenses incurred during hospitalization.

OASDI

Old-Age, Survivors, and Disability Insurance, a comprehensive federal benefits program that provides retirement, survivor, and disability benefits.

Hospital Insurance

Coverage typically part of health insurance policies, paying for hospitalization, surgeries, and related medical expenses.