Mary Inherits an Interest in Laser Partnership from Her Aunt

question 53

Multiple Choice

Mary inherits an interest in Laser Partnership from her Aunt Lillian during 2016.The fair market value of the interest as of the primary valuation date is $28,000.Aunt Lillian's adjusted basis was $16,000.What is Mary's initial basis and holding period in the partnership interest if she sells the interest seven months after inheriting it?

• A)$16,000, short-term.
• B)$16,000, long-term.
• C)$28,000, short-term.
• D)$28,000, long-term.
• E)Both depend on whether it is sold at a gain or a loss.

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Definitions:

Individualism

A theory in society that prioritizes individuals' freedom to act over the control of groups or the government.

Collectivism

A cultural orientation prioritizing the goals and well-being of the group over the individual, emphasizing interdependence, cooperation, and social harmony.

Fundamental Attribution Error

The tendency for observers to attribute other people's behavior to internal or dispositional factors and to downplay situational factors.

Overjustification Effect

The phenomenon where introducing an external incentive for an already internally motivated activity reduces intrinsic motivation.