Bart Has a Partnership Interest with a $32,000 Basis

question 1

Multiple Choice

Bart has a partnership interest with a $32,000 basis. He receives a current distribution of $6,000 cash, unrealized receivables (FMV $9,000, basis $10,000) , inventory (FMV $8,000, basis $4,000) , investment land (FMV $7,000, basis $4,000) , and building (FMV $20,000, basis $8,000) . No depreciation recapture applies with respect to the building. The partners' relative interests in the Sec. 751 assets do not change as a result of the current distribution. Bart's basis in the building is

• A)$3,000.
• B)$4,000.
• C)$6,000.
• D)$8,000.

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Definitions:

Production Levels

The quantity of goods or services produced within a given period by a company, industry, or sector.

Net Working Capital

It's the disparity between what a business owns in the short term and what it owes, reflecting its financial well-being and effectiveness in managing day-to-day operations.

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of a business.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year or less, including stocks, receivables, and inventory.