Robin Transferred Her 60 Percent Interest to Cardinal Company as Part

question 66

Multiple Choice

Robin transferred her 60 percent interest to Cardinal Company as part of a complete liquidation of the company.In the exchange she received land with a fair market value of $800,000.Robin's basis in the Cardinal stock was $900,000.The land had a basis to Cardinal Company of $1,000,000.What amount of loss does Cardinal recognize in the exchange and what is Robin's basis in the land she receives? The distribution was non-pro rata to Robin, a related person.

• A)$200,000 loss recognized by Cardinal and a basis to Robin in the land of $1,000,000.
• B)$200,000 loss recognized by Cardinal and a basis to Robin in the land of $800,000.
• C)No loss recognized by Cardinal and a basis to Robin in the land of $1,000,000.
• D)No loss recognized by Cardinal and a basis to Robin in the land of $800,000.

Understand the accounting for partners' capital and withdrawal accounts.

Comprehend the tax implications and accounting practices for partnerships.

Analyze the impact of partners' contributions and withdrawals on equity and partnership operations.

Understand and apply various PowerPoint formatting options.

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Definitions:

Half-moon

A crescent-shaped figure, often used to describe the visible white shape at the base of a human fingernail.

Erectile Tissue

Tissue in the body capable of becoming rigid and engorged with blood, primarily found in the penis and clitoris.

Clitoris

An erectile organ located at the anterior junction of the labia minora.

Labia

The external folds of skin surrounding the openings of the vagina, divided into the labia majora and the labia minora.