At the Beginning of the Tax Year,Wick's Basis for His

question 154

Multiple Choice

At the beginning of the tax year,Wick's basis for his partnership interest and his amount at risk in the partnership was $30,000.His share of partnership items for the year consisted of tax-exempt interest income of $2,000 and an ordinary loss of $44,000.He also received a distribution from the partnership of $20,000 cash during the year.For the tax year,Wick will report:

• A)A nontaxable distribution of $20,000,an ordinary loss of $10,000,and a suspended loss carryforward of $34,000.
• B)An ordinary loss of $32,000,a suspended loss carryforward of $12,000,and a taxable distribution of $20,000.
• C)A nontaxable distribution of $20,000,an ordinary loss of $12,000,and a suspended loss carryforward of $32,000.
• D)An ordinary loss of $44,000 and a nontaxable distribution of $20,000.

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Definitions:

Tissue Differentiation

The process by which unspecialized cells develop into their mature form and function.

Crossing Over

The exchange of genetic material between homologous chromosomes during meiosis, leading to genetic diversity.

Homologous Chromosomes

In a diploid organism, chromosomes that come in similar pairs based on their shape, size, and genetic material, with one coming from each parent.

Alleles

Various forms of the same gene, arising by mutation and are found at the same place on a chromosome, responsible for variation in inherited characteristics.