At the End of Last Year, Cynthia, a 20% Partner

question 34

Multiple Choice

At the end of last year, Cynthia, a 20% partner in the five-person CYG partnership, has an outside basis of $30,000 including her $15,000 share of CYG debt. On January 1 of the current year, Cynthia sells her partnership interest to Roger for a cash payment of $22,500 and the assumption of her share of CYG's debt. CYG has no hot assets. What is the amount and character of Cynthia's recognized gain or loss on the sale?

• A) $7,500 capital loss.
• B) $7,500 ordinary loss.
• C) $7,500 capital gain.
• D) $7,500 ordinary income.

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Definitions:

Freud

Austrian neurologist and the founder of psychoanalysis, a clinical method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Castration Anxiety

A concept in psychoanalytic theory referring to a child's fear of losing their genitalia, symbolizing a fear of losing power or being diminished.

Dream's Latent Content

Involves the hidden psychological meaning of a dream, as distinguished from its manifest content or overt storyline.

Freud

Originating from Austria, Sigmund Freud was a neurologist who created psychoanalysis, a methodology for the treatment of mental disturbances via conversational engagement between a psychoanalyst and a patient.