Ten Years Ago, Latesha Acquired a One-Third Interest in Dana

question 53

Multiple Choice

Ten years ago, Latesha acquired a one-third interest in Dana Associates, a partnership, for $26,000 cash. This year, Latesha's entire interest in the partnership is liquidated when her basis is $24,000. Dana's assets consist of the following: cash, $20,000; inventory with a basis of $46,000 and an FMV of $40,000. Dana has no liabilities. Latesha receives the cash of $20,000 in liquidation of her entire interest. What is Latesha's recognized loss on the liquidation of her interest in Dana?

• A)$0
• B)$4,000 long-term capital loss
• C)$4,000 short-term capital loss and $2,000 ordinary loss
• D)$4,000 long-term capital loss and $2,000 ordinary loss

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Definitions:

Self-Awareness

Being aware of one's own identity, sentiments, intentions, and aspirations.

Long-Term Goals

Objectives or targets that an individual or organization aims to achieve over an extended period, often requiring considerable time and effort.

Self-Regulation

The method through which people regulate their actions, feelings, and cognitions to attain extended objectives.

Incremental Theorists

Individuals who believe that abilities and intelligence can grow and improve over time through effort and learning.