The ABC Partnership Makes a Proportionate Distribution of Its Assets

question 63

Multiple Choice

The ABC Partnership makes a proportionate distribution of its assets to Charles,in complete liquidation of his partnership interest.The distribution consists of $30,000 in cash and capital assets with a basis to the partnership of $20,000 and a fair market value of $28,000.None of the payment is for partnership goodwill.At the time of the distribution,Charles's partnership basis is $42,000 and the partnership has no liabilities and no "hot assets." If the partnership makes an optional basis adjustment election on a timely filed return,it recognizes:

• A)Capital gain of $16,000 and increases the basis of its remaining assets by $8,000.
• B)Capital loss of $8,000 and decreases the basis of its remaining assets by $16,000.
• C)No gain or loss and increases the basis of its remaining assets by $8,000.
• D)No gain or loss and decreases the basis of its remaining assets by $16,000.
• E)None of the above.

---

Definitions:

Limitations

Constraints or restrictions that limit the effectiveness or scope of something.

Big Five Model

A personality framework that outlines five broad dimensions of human personality traits: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Limitations

Constraints or restrictions that hinder performance, capabilities, or outcomes.

Crisis Communication Plan

A strategic document or approach developed by an organization to prepare for, respond to, and recover from any emergency or unexpected event that could harm its operations, reputation, or stakeholders.