The SSC Partnership Balance Sheet Includes the Following Assets on December

question 21

Multiple Choice

The SSC Partnership balance sheet includes the following assets on December 31 of the current year: $$\begin{array} { | l | r | r | } \hline & \text { Basis } & \text { FMV } \\\hline \text { Cash } & \$ 180,000 & \$ 180,000 \\\hline \text { Accounts receivable } & - 0 - & 60,000 \\\hline \text { Land } & 90,000 & 120,000 \\\hline \text { Total } & \$ 270,000 & \$ 360,000 \\\hline\end{array}$$ Susan, a 1/3 partner, has an adjusted basis of $90,000 for her partnership interest. If Susan sells her entire partnership interest to Emma for $120,000 cash, how much capital gain and ordinary income must Susan recognize from the sale?

• A) $30,000 ordinary income
• B) $30,000 capital gain
• C) $10,000 ordinary income; $20,000 capital gain
• D) $10,000 capital gain; $20,000 ordinary income

---

Definitions:

Psychotherapy

A form of therapy aimed at treating mental health problems by talking with a psychologist, psychiatrist, or other mental health provider.

Uneasiness

A feeling of discomfort or anxiety about something that is not right.

Apprehension

A feeling of anxiety or fear that something bad or unpleasant will happen.

Manic-Depressive Illness

A mood disorder characterized by periods of elevated mood or mania alternating with periods of depression; also known as bipolar disorder.