Aaron Owns a 30% Interest in a Continuing Partnership

question 30

Multiple Choice

Aaron owns a 30% interest in a continuing partnership. The partnership distributes a $35,000 year-end cash bonus to all the partners. In a proportionate nonliquidating distribution, the partnership also distributed property (basis of $15,000; fair market value of $20,000) to Aaron. Immediately before the distribution, Aaron's basis in the partnership interest was $50,000. As a result of the distribution, Aaron recognizes:

• A) No gain or loss.
• B) Ordinary loss of $5,000.
• C) Capital loss of $5,000.
• D) Ordinary gain of $5,000.
• E) Capital gain of $5,000.

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Definitions:

Conceptual Skills

The ability to understand complex situations and problems, allowing for effective planning, problem-solving, and decision-making.

Roughly Equal Mix

A phrase describing a situation, composition, or distribution where elements or participants are approximately balanced or evenly divided in proportions.

Interpersonal Skills

These are the skills used by a person to interact effectively with others, including communication, listening, empathy, and conflict resolution abilities.

Sole Province

Sole province refers to an area or domain over which an entity (individual, organization, or state) has exclusive control or responsibility.