In a Proportionate Liquidating Distribution, Alexandria Receives a Distribution of $70,000

question 33

Multiple Choice

In a proportionate liquidating distribution, Alexandria receives a distribution of $70,000 cash, accounts receivable (basis of $0 and fair market value of $20,000) , and land (basis of $30,000 and fair market value of $60,000) . In addition, the partnership repays all liabilities, of which Alexandria's share was $40,000. Alexandria's basis in the entity immediately before the distribution was $90,000. As a result of the distribution, what is Alexandria's basis in the accounts receivable and land, and how much gain or loss does she recognize?

• A) $0 basis in accounts receivable; $0 basis in land; $20,000 gain.
• B) $0 basis in accounts receivable; $30,000 basis in land; $0 gain or loss.
• C) $0 basis in accounts receivable; $0 basis in land; $0 gain or loss.
• D) $0 basis in accounts receivable; $30,000 basis in land; $0 gain.
• E) $20,000 basis in accounts receivable; $0 basis in land; $20,000 gain.

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Definitions:

Government Officials

Individuals who hold positions of authority in governmental organizations and are responsible for enacting and enforcing laws and regulations.

Attitudinal Structuring

Efforts made in negotiations or in the workplace to shape or influence attitudes, behaviors, and perceptions among employees or negotiation parties.

Social Contract

A theoretical framework suggesting an implicit agreement among members of a society to cooperate for social benefits, such as sacrificing some individual freedom for state protection.

BATNA

Best Alternative To a Negotiated Agreement; the most advantageous alternative course of action a party can take if negotiations fail.