Marilyn Is a Partner in a Continuing Partnership

question 61

Multiple Choice

Marilyn is a partner in a continuing partnership.At the end of the current year,the partnership distributed to Marilyn in a proportionate,nonliquidating distribution cash of $40,000,inventory with a basis to the partnership of $12,000 and a fair market value of $10,000,and a parcel of land with a basis to the partnership of $30,000 and a fair market value of $40,000.Marilyn's basis in the partnership interest was $80,000 before the distribution.What basis does Marilyn take in the inventory and land,and what is her basis in the partnership interest following the distribution?

• A)$12,000 basis in inventory; $30,000 basis in land; $38,000 basis in partnership.
• B)$12,000 basis in inventory; $40,000 basis in land; $28,000 basis in partnership.
• C)$10,000 basis in inventory; $30,000 basis in land; $0 basis in partnership.
• D)$10,000 basis in inventory; $40,000 basis in land; $30,000 basis in partnership.
• E)$12,000 basis in inventory; $28,000 basis in land; $0 basis in partnership.

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Definitions:

Standard Deviation

A metric that quantifies the extent of differences or variability among a group of figures.

Variance

A measure of dispersion that shows how much the data points in a set differ from the mean.

Squared Difference

The result of subtracting one value from another and then squaring the result, often used in statistical calculations to measure variance.

Canadian Investments

Investments made in Canadian assets or securities, which may involve stocks, bonds, or other financial instruments based in Canada.