The SSC Partnership Balance Sheet Includes the Following Assets on December

question 76

Multiple Choice

The SSC Partnership balance sheet includes the following assets on December 31 of the current year: $\begin{array} { l r r } &{ \text { Basis } } & \text { FMV } \\\text { Cash } & \$ 180,000 & \$ 180,000 \\\text { Accourts receivable } & - 0 - & 60,000 \\ \text { Lard } & \underline {90,000} & \underline {120,000} \\\text { Total } & \underline {\$ 270,000} & \underline {\$ 360,000}\end{array}$ Susan,a 1/3 partner,has an adjusted basis of $90,000 for her partnership interest.If Susan sells her entire partnership interest to Emma for $120,000 cash,how much capital gain and ordinary income must Susan recognize from the sale?

• A)$30,000 ordinary income.
• B)$30,000 capital gain.
• C)$10,000 ordinary income; $20,000 capital gain.
• D)$10,000 capital gain; $20,000 ordinary income.

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Definitions:

Behavioralist Approach

A method in economics that uses psychological insights into human behavior to explain economic decision-making.

Legal Cartel Theory

A concept in economic theory suggesting that certain legal frameworks or conditions can enable firms to engage in cartel-like behavior without explicit agreements.

Sherman Act

A landmark federal statute in the field of United States antitrust law passed by Congress in 1890 to prohibit monopolistic business practices.