At the Beginning of the Year, Elsie's Basis in the E&G

question 85

Multiple Choice

At the beginning of the year, Elsie's basis in the E&G Partnership interest is $60,000. She receives a proportionate nonliquidating distribution from the partnership consisting of $10,000 of cash, unrealized accounts receivable (basis of $0, fair market value $30,000) , and inventory (basis of $10,000, fair market value of $20,000) . After the distribution, Elsie's bases in the accounts receivable, inventory, and partnership interest are:

• A) $0; $10,000; and $40,000.
• B) $0; $20,000; and $30,000.
• C) $30,000; $10,000; and $10,000.
• D) $30,000; $20,000; and $0.
• E) None of the above.

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Definitions:

Language Acquisition Device

A theoretical component of the human mind proposed by Noam Chomsky, suggesting an innate ability or mechanism that facilitates the learning of language.

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Pertaining to law; relating to the system of rules that are recognized and enforced by a particular country or community.

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Relating to principles of right and wrong behavior and the goodness or badness of human character.

Conservation

The principle that certain properties of objects, like volume or mass, remain the same even when their form or appearance changes, in cognitive development theory.