Stephanie Receives a Proportionate Nonliquidating Distribution from the QRS Partnership

question 1

Multiple Choice

Stephanie receives a proportionate nonliquidating distribution from the QRS Partnership. The distribution consists of $60,000 cash and property with an adjusted basis to the partnership of $30,000 and a fair market value of $25,000. Immediately before the distribution, Stephanie's adjusted basis for her partnership interest is $80,000. Stephanie's basis in the noncash property received is:

• A) $15,000.
• B) $20,000.
• C) $25,000.
• D) $30,000.
• E) None of the above.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds over a period, often shown on the income statement.

Face Value

The nominal or dollar value printed on a security or financial instrument, representing its legal value.

Note Payable

A written promise to pay a specified amount of money, usually with interest, at a future date.

Accrued Interest

Accrued Interest is the interest that has accumulated on a debt or investment over a specific period but has not yet been paid.