Frank Receives a Proportionate Current (Nonliquidating) Distribution from the AEF

question 155

Multiple Choice

Frank receives a proportionate current (nonliquidating) distribution from the AEF Partnership. The distribution consists of $10,000 cash and property (adjusted basis to the partnership of $54,000 and fair market value of $60,000) . Immediately before the distribution, Frank's adjusted basis in the partnership interest was $50,000. His basis in the noncash property received is:

• A) $0.
• B) $40,000.
• C) $50,000.
• D) $54,000.
• E) $60,000.

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Definitions:

Cicatrix

The medical term for a scar that is left on the skin after a wound has healed.

Comedo

A clogged hair follicle in the skin, often seen in conditions like acne; can be open (blackhead) or closed (whitehead).

Epidermis

The outermost layer of the skin, serving as the primary barrier against the environment.

Dermis

The thick layer of living tissue below the epidermis that forms the true skin, containing sweat glands, hair follicles, and other structures.