Nadine Fimple Is a One-Third Partner in the NWL Partnership

question 18

Essay

Nadine Fimple is a one-third partner in the NWL Partnership with equal inside and outside bases. On January 1, NWL distributes $100,000 to Nadine in complete liquidation of her FPL interest. NWL's balance sheet as of January 1 is as follows: $\begin{array}{l}\begin{array}{lrr}&\text { Basis}&\text { FMV: }\\\text { Cash} & {\$120,000} & \$ 120,000 \\\text { Inventory} & \mathbf{6 0 , 0 0 0} & \mathbf{180 , 0 0 0} \\\text { Total} & \$\mathbf{18 0 , 0 0 0} & \$300,000 \\\\\text { Nadine, capital} & {\$60,000} &\\\text { Wendell, capital} & \mathbf{60 , 0 0 0} &\\\text { Louis, capital} & \underline{\mathbf{6 0 , 0 0 0}}& \\\text { Total} & \$\mathbf{18 0 , 0 0 0} &\\\end{array}\end{array}$ What is the amount and character of Nadine's recognized gain or loss on the distribution?

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Definitions:

Bureaucracy

A system of government in which most of the important decisions are made by state officials rather than by elected representatives.

Politicians

Individuals actively involved in politics, usually as members of governing bodies or political parties, influencing public policy and decision-making.

Officials

People appointed or elected to a position of authority within an organization or government to enforce rules and regulations.

Benjamin Disraeli

A prominent British politician and writer who served twice as Prime Minister of the United Kingdom, known for his influential role in the Conservative Party and his contributions to the British Empire.