Mark Receives a Proportionate Nonliquidating Distribution

question 92

Multiple Choice

Mark receives a proportionate nonliquidating distribution.At the beginning of the partnership year,the basis of his partnership interest is $100,000.During the year,he received a cash distribution of $40,000 and a property distribution (basis of $30,000,fair market value of $25,000) .In addition,Mark's share of partnership liabilities was reduced by $10,000 during the year.How much gain or loss does Mark recognize;what is his basis in the property he received;and what is his remaining basis in the partnership interest?

• A)$25,000 loss;$25,000 basis in property;$0 remaining basis.
• B)$30,000 loss;$30,000 basis in property;$0 remaining basis.
• C)$0 gain or loss;$25,000 basis in property;$25,000 remaining basis.
• D)$0 gain or loss;$30,000 basis in property;$20,000 remaining basis.
• E)$0 gain or loss;$20,000 basis in property;$30,000 remaining basis.

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Definitions:

Nasal Passages

The channels in the nose through which air enters the body and is warmed and humidified before reaching the lungs.

Olfaction

The sense of smell or the act of smelling.

Smelling

The ability to perceive odors or scents through the olfactory system.

Orthopnea

Difficulty breathing that occurs when lying down and is relieved by sitting up, often associated with heart failure.