Nadine Fimple Is a One-Third Partner in the NWL Partnership

question 35

Short Answer

Nadine Fimple is a one-third partner in the NWL Partnership with equal inside and outside bases. On January 1, NWL distributes $100,000 to Nadine in complete liquidation of her FPL interest. NWL's balance sheet as of January 1 is as follows:
$$\begin{array} { | l | r | r | } \hline & \text { Basis } & \text { FMV } \\\hline \text { Cash } & \$ 120,000 & \$ 120,000 \\\hline \text { Inventory } & 60,000 & 180,000 \\\hline \text { Total } & \$ 180,000 & \$ 300,000 \\\hline\end{array}$$ What is the amount and character of Nadine's recognized gain or loss on the distribution?
$$\begin{array} { | l | r | } \hline \text { Nadine, capital } & \$ 60,000 \\\hline \text { Wendell, capital } & 60,000 \\\hline \text { Louis, capital } & 60,000 \\\hline \text { Total } & \$ 180,000 \\\hline\end{array}$$

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Definitions:

Suprachiasmatic Nucleus

A small region of the brain in the hypothalamus, responsible for controlling circadian rhythms.

Optic Chiasm

Junction of the optic nerves, one from each eye, at which the axons from the nasal halves of the retinas cross to the brain’s opposite side.

Hypothalamus

A region of the brain that regulates vital bodily functions, including temperature, hunger, thirst, fatigue, sleep, and circadian rhythms.

Sleep State

A natural, reversible state of reduced responsiveness to external stimuli and relative inactivity, accompanied by complex physiological processes essential for health.