Suzy Owns a 30% Interest in the JSD LLC

question 159

Multiple Choice

Suzy owns a 30% interest in the JSD LLC.In liquidation of the entity, Suzy receives a proportionate distribution of $30,000 cash, inventory (basis of $16,000, fair market value of $18,000) , and land (basis of $25,000, fair market value of $30,000) .Suzy's basis in the entity immediately before the distribution was $80,000.As a result of the distribution, what is Suzy's basis in the inventory and land, and how much gain or loss does she recognize?

• A)$0 basis in inventory; $25,000 basis in land; $0 gain or loss.
• B)$16,000 basis in inventory; $34,000 basis in land; $0 gain or loss.
• C)$16,000 basis in inventory; $25,000 basis in land; $9,000 loss.
• D)$18,000 basis in inventory; $32,000 basis in land; $0 gain.
• E)$25,000 basis in inventory; $25,000 basis in land; $0 gain or loss.

---

Definitions:

Nuclear Reactor

A device used to initiate and control a sustained nuclear chain reaction, primarily for the generation of electricity.

Steam Generation

The process of producing steam, typically by boiling water or through the use of heat exchangers.

Fission Products

The atoms, neutrons, and radiation produced by the splitting of a heavy atomic nucleus, such as uranium or plutonium, during nuclear fission, often involving the release of large amounts of energy.

Phosphorescence

The phenomenon of light emission by a substance without combustion or perceptible heat, persisting for some time after excitation by ultraviolet light or other forms of energy.