Beth Has an Outside Basis of $60,000 in the BBDE

question 38

Multiple Choice

Beth has an outside basis of $60,000 in the BBDE Partnership as of December 31 of the current year. On that date the partnership liquidates and distributes to Beth a proportionate distribution of $20,000 cash and inventory with an inside basis to the partnership of $18,000 and a fair market value of $22,000. In addition, Beth receives a desk (not inventory) which has an inside basis and fair market value of $200 and $350, respectively. None of the distribution is for partnership goodwill. How much gain or loss will Beth recognize on the distribution, and what basis will she take in the desk?

• A) $21,800 loss; $200 basis.
• B) $21,650 loss; $350 basis.
• C) $0 loss; $200 basis.
• D) $0 loss; $22,000 basis.
• E) None of the above.

---

Definitions:

Black College Freshmen

African American students who are in their first year of college or university studies.

Rejection Identification Theory

The idea that people can offset the negative consequences of being targeted by discrimination by feeling a strong sense of identification with their stigmatized group.

Discrimination

Unfair or prejudiced treatment of different categories of people or things, especially on the grounds of race, age, or sex.

Negative Stereotypes

Preconceived and oversimplified beliefs about a particular group of people or things that are mostly unfavorable and can lead to discrimination.