Mack Has a Basis in a Partnership Interest of $200,000

question 104

Multiple Choice

Mack has a basis in a partnership interest of $200,000, including his share of partnership debt. At the end of the current year, the partnership distributed to Mack, in a proportionate nonliquidating distribution, cash of $20,000, inventory (basis to the partnership of $30,000 and fair market value of $40,000) , and land (basis to the partnership of $40,000 and fair market value of $42,000) .In addition, Mack's share of partnership debt decreased by $12,000 during the year. What basis does Mack take in the inventory and land and in the partnership interest (including debt share) following the distribution?

• A)$30,000 basis in inventory; $40,000 basis in land, $98,000 basis in partnership.
• B)$30,000 basis in inventory; $42,000 basis in land, $110,000 basis in partnership.
• C)$40,000 basis in inventory; $40,000 basis in land, $86,000 basis in partnership.
• D)$40,000 basis in inventory; $42,000 basis in land, $98,000 basis in partnership.
• E)$40,000 basis in inventory; $42,000 basis in land, $110,000 basis in partnership.

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Definitions:

Sociability

The quality of being inclined to seek out social interactions and enjoy the company of others.

Dominance

The power and influence one individual or group has over another, often used in the context of social hierarchies.

Supportive Style

A manner of interaction that provides encouragement, feedback, and assistance in a positive way.

Emotive

Related to or provoking strong feelings, emotions, or responses.