Martin Has a Basis in a Partnership Interest of $100,000

question 11

Multiple Choice

Martin has a basis in a partnership interest of $100,000. At the end of the current year, the partnership distributed to Martin, in a proportionate nonliquidating distribution, cash of $10,000, inventory (basis to the partnership of $6,000 and fair market value of $12,000) , and land (basis to the partnership of $20,000 and fair market value of $15,000) . In addition, Martin's share of partnership debt decreased by $10,000 during the year. What basis does Martin take in the inventory and land and in the partnership interest following the distribution?

• A) $6,000 basis in inventory; $15,000 basis in land, $59,000 basis in partnership.
• B) $6,000 basis in inventory; $20,000 basis in land, $54,000 basis in partnership.
• C) $12,000 basis in inventory; $15,000 basis in land, $53,000 basis in partnership.
• D) $12,000 basis in inventory; $20,000 basis in land, $53,000 basis in partnership.
• E) $12,000 basis in inventory; $20,000 basis in land, $48,000 basis in partnership.

Distinguish between the exercise price and the market price in option trading.

Understand the concepts of in the money, at the money, and out of the money options.

Distinguish between put and call options and their market behaviors.

Calculate the break-even price for option positions.

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Definitions:

Control Theory

a theory in sociology that suggests people's relationships, commitments, values, and beliefs encourage them not to break the law.

Animalistic Impulses

Innate, primitive behaviors or urges that are driven by basic physiological or survival needs.

Merton's Theory

A sociological perspective that elaborates on the causes of deviant behavior, focusing on the disparity between societal goals and the means to achieve them; synonymous with Anomie-Strain Theory but with a specific focus on the work of Robert K. Merton.

Hippie Counter-Culture

A youth movement of the 1960s, characterized by a rejection of conventional social norms in favor of peace, love, and personal freedom.