Travis and His Three Sisters Are Equal Partners in the Heron

question 161

Multiple Choice

Travis and his three sisters are equal partners in the Heron Partnership.In 2010,Travis sells property (basis of $300,000) to Heron for its fair market value of $280,000.In 2012,Heron sells the property to a third party for $290,000.Which of the following statements correctly describes these transactions?

• A) Travis has no recognized loss, and Heron has a recognized gain of $10,000.
• B) Travis has no recognized loss, and Heron has no recognized gain or loss.
• C) Travis has a recognized loss of $20,000, and Heron has no recognized gain or loss.
• D) Travis has a recognized loss of $20,000, and Heron has a recognized gain of $10,000.
• E) None of the above.

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