In a Proportionate Liquidating Distribution,Barbara Receives a Distribution of $40,000

question 152

Multiple Choice

In a proportionate liquidating distribution,Barbara receives a distribution of $40,000 cash,accounts receivable (basis of $0 and fair market value of $20,000) ,and land (basis of $20,000 and fair market value of $30,000) .In addition,the partnership repays all liabilities,of which Barbara's share was $40,000.Barbara's basis in the entity immediately before the distribution was $50,000.As a result of the distribution,what is Barbara's basis in the accounts receivable and land,and how much gain or loss does she recognize?

• A)$0 basis in accounts receivable;$0 basis in land;$30,000 gain.
• B)$0 basis in accounts receivable;$10,000 basis in land;$0 gain or loss.
• C)$0 basis in accounts receivable;$20,000 basis in land;$0 gain or loss.
• D)$20,000 basis in accounts receivable;$30,000 basis in land;$40,000 gain.
• E)$20,000 basis in accounts receivable;$30,000 basis in land;$80,000 gain.

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