Higlo Paints Is a Partnership That Reports an Operating Income

question 92

Multiple Choice

Higlo Paints is a partnership that reports an operating income of $50,000 in the current year. Higlo also has a $20,000 Section 1231 gain from the sale of a building and $10,000 in nondeductible expenses. Bernice owns 20% of Higlo and withdraws $5,000 from the partnership during the current year. Bernice's basis will increase by:

• A)$5,000
• B)$7,000
• C)$9,000
• D)$10,000
• E)$12,000

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Definitions:

Spontaneously Aborted

A term used in medical contexts to describe a miscarriage that occurs naturally without medical intervention.

Prenatal Environmental Influences

Factors in the environment affecting the development of an embryo or fetus before birth, including nutrition, stress, and exposure to toxins.

Zygote

The initial cell formed when a new organism is produced by sexual reproduction, resulting from the fusion of two gametes.

Gestation

The period of development within the womb from conception until birth in mammals.