Marty Receives a Proportionate Nonliquidating Distribution When the Basis of Her

question 103

Multiple Choice

Marty receives a proportionate nonliquidating distribution when the basis of her partnership interest is $50,000.The distribution consists of $60,000 cash and noninventory property (adjusted basis to the partnership of $20,000;fair market value of $23,000) .How much gain or loss does Marty recognize,and what is her basis in the distributed property and in her partnership interest following the distribution?

• A)$0 gain or loss;$20,000 basis in property;$0 basis in partnership interest.
• B)$0 gain or loss;$23,000 basis in property;$2,000 basis in partnership interest.
• C)$10,000 capital gain;$0 basis in property;$0 basis in partnership interest.
• D)$10,000 capital gain;$20,000 basis in property;$0 basis in partnership interest.
• E)$10,000 ordinary income;$0 basis in property;$10,000 basis in partnership interest.

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Definitions:

Abdominopelvic Cavity

A body cavity comprising both the abdominal and the pelvic cavities, housing major organs of digestion, reproduction, and excretion.

Anterior Body Cavity

The front part of the body cavity that houses organs in the thoracic and abdominopelvic regions.

Thoracic

Thoracic refers to the chest region of the body, housing major organs such as the heart and lungs within the rib cage.

Abdominopelvic Cavities

Refers to the combined space within the abdomen and pelvis, housing organs such as the liver, stomach, intestines, and reproductive organs.