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.

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Ethnic Group

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The unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, or sex.

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Preconceived opinion or bias against an individual or group based on their characteristics, without any factual basis.

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