Matt Receives a Proportionate Nonliquidating Distribution

question 55

Multiple Choice

Matt receives a proportionate nonliquidating distribution. At the beginning of the partnership year, the basis of his partnership interest is $60,000. During the year, he received a cash distribution of $25,000 and a property distribution (basis of $20,000 and fair market value of $12,000) . In addition, Matt's share of partnership liabilities was reduced by $20,000 during the year. How much gain or loss does Matt recognize; what is his basis in the property he received; and what is his remaining basis in the partnership interest?

• A) $3,000 loss; $12,000 basis in property; $0 remaining basis.
• B) $0 gain or loss; $15,000 basis in property; $0 remaining basis.
• C) $0 gain or loss; $20,000 basis in property; $15,000 remaining basis.
• D) $0 gain or loss; $12,000 basis in property; $23,000 remaining basis.
• E) $5,000 gain; $20,000 basis in property; $0 remaining basis.

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Definitions:

Resource Theory

A theory in social science that suggests individuals have resources (e.g., economic, emotional) that they use to maintain power in relationships.

Physical Abuse

The use of physical force against someone in a way that injures or endangers that person.

Society Condones

Society condones refers to the broader social acceptance or tolerance of certain behaviors, activities, or ideas, even if they may be considered immoral or illegal by some standards.

Patriarchy/Male Dominance

A social system in which men hold primary power, dominating in roles of political leadership, moral authority, social privilege, and control of property.