Riley Is a 50% Partner in the RF Partnership and Has

question 56

Multiple Choice

Riley is a 50% partner in the RF Partnership and has an outside basis of $56,000 at the end of the year prior to any distributions. On December 31, Riley receives a proportionate operating distribution of $6,000 cash and a parcel of land with a $14,000 fair value and an $8,000 basis to RF. What is the amount and character of Riley's recognized gain or loss and what is his basis in his partnership interest?

• A) $0 gain, $36,000 basis.
• B) $0 gain, $42,000 basis.
• C) $0 gain, $50,000 basis.
• D) $0 gain, $56,000 basis.

---

Definitions:

Carnaval

An annual festival characterized by music, dancing, and the use of masquerade, held in the days leading up to Lent, especially famous in Brazil.

Heterophilous

characterized by or involving interaction between individuals that are different in some demographic or psychological attributes.

Polymorphic

In computing, it refers to the ability of objects to process data differently based on their data type or class; in biology, it indicates the occurrence of two or more clearly different morphs or forms.

Monomorphic

Characterized by having a single shape or form, often used in the context of genes or polymorphism.