The December 31, 2014, Balance Sheet of DBW, LLP, a Service-Providing

question 29

Essay

The December 31, 2014, balance sheet of DBW, LLP, a service-providing partnership is as follows:
The partners share equally in partnership capital, income, gain, loss, deduction, and credit. Capital is not a material income-producing factor to the partnership. On December 31, 2014, partner Dana (who is an active managing partner in the partnership) receives a distribution of $120,000 cash in liquidation of her partnership interest under § 736. Dana's outside basis for the partnership interest immediately before the distribution is $90,000. How much is Dana's gain or loss on the distribution and what is its character?

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Definitions:

American Federation of Labor

A national federation of labor unions in the United States, founded in 1886, focused on advocating for better working conditions, wages, and rights for workers.

Rural Electrification Agency

Was a U.S. government agency established in 1935 to bring electricity to rural areas, profoundly impacting agricultural productivity and the quality of rural life.

Electricity

A form of energy resulting from the existence of charged particles such as electrons or protons, manifesting as an attraction or repulsion between those particles.