On December 1, Antonio, a Member of a Three-Person Partnership

question 39

Multiple Choice

On December 1, Antonio, a member of a three-person partnership, purchases investment securities from the partnership for their $37,000 FMV. All partners share profits and losses equally. The securities were acquired by the partnership for $25,000 cash in March of the current year. What amount and character of gain will Antonio recognize because of this transaction?

• A)$0 gain
• B)$4,000 ordinary income
• C)$4,000 short-term capital gain
• D)$12,000 ordinary income

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Definitions:

Deontology

The ethical theory which states that an action can be determined as ethical on the basis of right and wrong, regardless of its consequences.

Public Disclosure Test

A legal standard used to determine whether information has been effectively communicated to the public, particularly in defamation and privacy cases.

Ethics Shapes

Suggests that ethical principles influence or determine the formation of personal values and behavior.

Business Laws

Set of rules and regulations that govern the formation, operation, and dissolution of businesses.