Eric Receives a Proportionate Nonliquidating Distribution When the Basis of His

question 31

Multiple Choice

Eric receives a proportionate nonliquidating distribution when the basis of his partnership interest is $80,000. The distribution consists of $20,000 in cash and property with an adjusted basis to the partnership of $45,000 and a fair market value of $40,000. Eric's basis in the noncash property and his remaining basis in the partnership interest are:

• A) $45,000; $35,000.
• B) $45,000; $15,000.
• C) $40,000; $40,000.
• D) $40,000; $20,000.
• E) None of the above.

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Definitions:

Sacrum

A large, triangular bone at the base of the spine, where it is inserted between the two hip bones.

Anorectal Junction

The area where the anal canal meets the rectum, important in the study of gastrointestinal function and disorders.

Rectum

The final section of the large intestine, terminating at the anus, where feces are stored before being expelled.

Anal Canal

The final segment of the digestive tract through which feces are excreted from the body.