At the Beginning of the Year, Elsie's Basis in the E&G

question 22

Multiple Choice

At the beginning of the year, Elsie's basis in the E&G Partnership interest is $90,000.She receives a proportionate nonliquidating distribution from the partnership consisting of $10,000 of cash, unrealized accounts receivable (basis of $0, fair market value $40,000) , and land (basis of $30,000, fair market value of $50,000) .After the distribution, Elsie's bases in the accounts receivable, land, and partnership interest are:

• A)$0; $30,000; and $50,000.
• B)$0; $50,000; and $30,000.
• C)$40,000; $30,000; and $10,000.
• D)$40,000; $40,000; and $0.
• E)None of the above.

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Definitions:

Annual Payments

Payments made once a year, often related to loans, leases, or insurance policies.

Lease

A contractual agreement where one party, the lessor, grants another party, the lessee, the right to use an asset for a specified period in exchange for payments.

Present Value

The present value of a future amount of money or a series of cash inflows, considering a certain rate of return.

Surround Sound Stereo

A system of audio amplification that enhances the depth and quality of sound reproduction by using multiple speakers around the listener.