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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Definitions:

Mass Production

The large-scale manufacturing of goods using standardized designs and assembly-line techniques to achieve economies of scale.

Lean Production

A systematic method for waste minimization within a manufacturing system without sacrificing productivity.

Continuous Process Improvement

An ongoing effort to improve products, services, or processes by making incremental changes or implementing major overhauls to improve efficiency and quality.

Self-Directed Work Teams

Groups of employees who are given the autonomy to manage themselves and the work they do, often encompassing planning, execution, and monitoring of their tasks.