The PW Partnership's Balance Sheet Includes the Following Assets Immediately

question 67

Multiple Choice

The PW partnership's balance sheet includes the following assets immediately before it liquidates: $$\begin{array} { | l | r | r | } \hline \text { Assets: } & \text { Basis } & \text { FMV } \\\hline \text { Cash } & \$ 48,000 & \$ 48,000 \\\text { Land held For investment } & 96,000 & 132,000 \\\hline\end{array}$$ In complete liquidation PW distributes the cash to Pamela and the unrealized receivables to Wade (equal partners) . Pamela and Wade each have an outside basis in PW equal to $5,000. PW has no liabilities at the time of the liquidation. What is the amount and character of Pamela's recognized gain or loss?

• A) $0
• B) $5,000 capital gain
• C) $5,000 ordinary income
• D) $2,500 capital gain and $2,500 ordinary income

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Definitions:

Learning Sets

The concept in psychology that refers to the idea that learning is facilitated through the experience of solving similar problems, leading to an ability to generalize problem-solving strategies.

Secondary Reinforcer

A conditioned reinforcer that gains its reinforcing power through its association with primary reinforcers; examples include money, grades, and tokens.

Cognitive Map

An internal representation of the spatial relationships among objects in an environment, allowing for navigation and understanding of that space.

Observational Learning

The process of learning behaviors by watching and imitating others.