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

question 94

Multiple Choice

The PW partnership's balance sheet includes the following assets immediately before it liquidates: $\begin{array}{lrr}&\underline{Basis}&\underline{FMV}\\\text { Cash } & \$ \mathbf{\$ 1 0 , 0 0 0} & \$ \mathbf{\$ 1 0 , 0 0 0} \\\text { Unrealized receivables } & \underline{-0-} & \underline{\mathbf{\$ 2 0 , 0 0 0}} \\\text { Total } &\underline{\underline{{\mathbf{\$ 1 0 , 0 0 0}}}}& \underline{\underline{\$20,000}}\end{array}$ 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 Pamela'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:

Hypothalamus

A region of the brain that controls an extensive range of bodily functions, including hormone secretion, temperature regulation, and hunger control.

Caloric Intake

The total amount of calories consumed through food and beverages within a certain period, crucial for managing weight and nutritional health.

Estrogens

The class of sex hormones that predominates in females, produced mainly by the ovaries.

Androgens

The class of sex hormones that predominates in males, produced by the testes in males and by the adrenal glands in all people.