Lars Has a Basis in His Partnership Interest in XXL

question 108

Multiple Choice

Lars has a basis in his partnership interest in XXL of $100,000.He sells the partnership interest in XXL for $160,000.XXL is a cash-basis partnership which has accounts receivable with a $30,000 fair market value and a zero adjusted basis.Lars's share of these receivables is $10,000.What is the amount and character of the gain that Lars recognizes on the sale of his partnership interest?

• A)$50,000 capital gain
• B)$60,000 capital gain
• C)$10,000 ordinary income and $50,000 capital gain
• D)$10,000 ordinary income and $60,000 capital gain

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Definitions:

Sensory Memory

The shortest-term element of memory, it allows the ability to retain impressions of sensory information after the original stimuli have ended.

Exact Replica

A precise duplicate or copy of an object, artwork, or item, indistinguishable from the original.

Semantic Memory

A type of long-term memory involving the capacity to recall words, concepts, or numbers, which is essential for the use and understanding of language.

Language

A complex system of communication that employs symbols, sounds, and rules to convey information and express thoughts and emotions.