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Question;1180.,45;Stephanie receives a proportionate nonliquidating distribution from the QRS;Partnership. The distribution consists of $60,000 cash and property with an;adjusted basis to the partnership of $30,000 and a fair market value of;$25,000. Immediately before the distribution, Stephanie?s adjusted basis for;her partnership interest is $80,000. Stephanie?s basis in the noncash property;received is;a.;$15,000.;b. $20,000.;c. $25,000.;d. $30,000.;e. None of the above.;1181.,46;At the beginning of the year, Elsie?s basis in the E&G Partnership interest;is $60,000. She receives a proportionate nonliquidating distribution from the;partnership consisting of $10,000 of cash, unrealized accounts receivable;(basis of $0, fair market value $30,000), and inventory (basis of $10,000, fair;market value of $20,000). After the distribution, Elsie?s bases in the accounts;receivable, inventory, and partnership interest are;a.;$0, $10,000, and $40,000.;b. $0, $20,000, and $30,000.;c. $30,000, $10,000, and $10,000.;d. $30,000, $20,000, and $0.;e. None of the above.;1182.,47;Megan?s basis was $100,000 in the MAR Partnership interest just before she;received a proportionate nonliquidating distribution consisting of land held;for investment (basis of $80,000, fair market value of $100,000) and inventory;(basis of $60,000, fair market value of $60,000). After the distribution;Megan?s bases in the land and inventory are, respectively;a.;$80,000 and $20,000.;b. $100,000 and $0.;c. $40,000 and $60,000.;d. $50,000 and $50,000.;e. None of the above.;1183.,48;Matt receives a proportionate nonliquidating distribution. At the beginning of;the partnership year, the basis of his partnership interest is $60,000. During;the year, he received a cash distribution of $25,000 and a property;distribution (basis of $20,000 and fair market value of $12,000). In addition;Matt?s share of partnership liabilities was reduced by $20,000 during the year.;How much gain or loss does Matt recognize, what is his basis in the property he;received, and what is his remaining basis in the partnership interest?;a.;$3,000 loss, $12,000 basis in property, $0 remaining basis.;b. $0 gain or loss, $15,000 basis in;property, $0 remaining basis.;c. $0 gain or loss, $20,000 basis in;property, $15,000 remaining basis.;d. $0 gain or loss, $12,000 basis in;property, $23,000 remaining basis.;e. $5,000 gain, $20,000 basis in;property, $0 remaining basis.;1184.,49;Martin has a basis in a partnership interest of $100,000. At the end of the;current year, the partnership distributed to Martin, in a proportionate;nonliquidating distribution, cash of $10,000, inventory (basis to the;partnership of $6,000 and fair market value of $12,000), and land (basis to the;partnership of $20,000 and fair market value of $15,000). In addition, Martin?s;share of partnership debt decreased by $10,000 during the year. What basis does;Martin take in the inventory and land and in the partnership interest following;the distribution?;a.;$6,000 basis in inventory, $15,000 basis in land, $59,000 basis in partnership.;b. $6,000 basis in inventory, $20,000;basis in land, $54,000 basis in partnership.;c. $12,000 basis in inventory, $15,000;basis in land, $53,000 basis in partnership.;d. $12,000 basis in inventory, $20,000;basis in land, $53,000 basis in partnership.;e. $12,000 basis in inventory, $20,000 basis;in land, $48,000 basis in partnership.;1185.,50;Andrew receives a proportionate nonliquidating distribution from the AEF;Partnership. The distribution consists of $50,000 cash and property (adjusted;basis to the partnership of $34,000 and fair market value of $42,000).;Immediately before the distribution, Andrew?s adjusted basis in the partnership;interest was $40,000. His basis in the noncash property received is;a.;$0.;b. $34,000.;c. $42,000.;d. $50,000.;e. None of the above.;1186.,51;Aaron owns a 30% interest in a continuing partnership. The partnership;distributes a $35,000 year-end cash bonus to all the partners. In a;proportionate nonliquidating distribution, the partnership also distributed;property (basis of $15,000, fair market value of $20,000) to Aaron. Immediately;before the distribution, Aaron?s basis in the partnership interest was $50,000.;As a result of the distribution, Aaron recognizes;a.;No gain or loss.;b. Ordinary loss of $5,000.;c. Capital loss of $5,000.;d. Ordinary gain of $5,000.;e. Capital gain of $5,000.;1187.,52;Eric receives a proportionate nonliquidating distribution when the basis of his;partnership interest is $80,000. The distribution consists of $20,000 in cash;and property with an adjusted basis to the partnership of $45,000 and a fair;market value of $40,000. Eric?s basis in the noncash property and his remaining;basis in the partnership interest are;a.;$45,000, $35,000.;b. $45,000, $15,000.;c. $40,000, $40,000.;d. $40,000, $20,000.;e. None of the above.;1188.,53;Martha receives a proportionate nonliquidating distribution when the basis of;her partnership interest is $50,000. The distribution consists of $60,000 cash;and noninventory property (adjusted basis to the partnership of $20,000, fair;market value of $23,000). How much gain or loss does Martha recognize, and what;is her basis in the distributed property and in her partnership interest;following the distribution?;a.;$0 gain or loss, $20,000 basis in property, $0 basis in partnership interest.;b. $0 gain or loss, $23,000 basis in;property, $2,000 basis in partnership interest.;c. $10,000 capital gain, $0 basis in;property, $0 basis in partnership interest.;d. $10,000 capital gain, $20,000 basis;in property, $0 basis in partnership interest.;e. $10,000 ordinary income, $0 basis in;property, $10,000 basis in partnership interest.;1189.,54;Nicole?s basis in her partnership interest was $160,000, including her $50,000;share of partnership liabilities. The partnership decides to liquidate, and;after repaying all liabilities, distributes all remaining assets;proportionately to the partners. Nicole receives $30,000 cash and accounts;receivable with a $50,000 basis and a $52,000 fair market value to the;partnership. What gain or loss does Nicole recognize, and what is her basis in;the accounts receivable?;a.;$80,000 loss, $50,000 basis.;b. $30,000 loss, $50,000 basis.;c. $28,000 loss, $52,000 basis.;d. $78,000 loss, $52,000 basis.;e. $0 loss, $80,000 basis.;1190.,55;Anthony?s basis in the WAM Partnership interest was $200,000 just before he;received a proportionate liquidating distribution consisting of investment land;(basis of $90,000, fair market value $100,000), and inventory (basis of;$30,000, fair market value $70,000). After the distribution, Anthony?s;recognized gain or loss and his basis in the land and inventory are;a.;$80,000 loss, $90,000 (land), $30,000 (inventory).;b. $70,000 loss, $100,000 (land);$30,000 (inventory).;c. $30,000 loss, $100,000 (land);$70,000 (inventory).;d. $0 gain or loss, $170,000 (land);$30,000 (inventory).;e. None of the above.;1191.,56;Beth has an outside basis of $60,000 in the BBDE Partnership as of December 31;of the current year. On that date the partnership liquidates and distributes to;Beth a proportionate distribution of $20,000 cash and inventory with an inside;basis to the partnership of $18,000 and a fair market value of $22,000. In;addition, Beth receives a desk (not inventory) which has an inside basis and;fair market value of $200 and $350, respectively. None of the distribution is;for partnership goodwill. How much gain or loss will Beth recognize on the;distribution, and what basis will she take in the desk?;a.;$21,800 loss, $200 basis.;b. $21,650 loss, $350 basis.;c. $0 loss, $200 basis.;d. $0 loss, $22,000 basis.;e. None of the above.;1192.,57;Landon received $50,000 cash and a capital asset (basis of $70,000 and fair;market value of $80,000) in a proportionate liquidating distribution. His basis;in his partnership interest was $100,000 prior to the distribution. How much;gain or loss does Landon recognize and what is his basis in the asset received?;a.;$0 gain or loss, $70,000 basis.;b. $0 gain or loss, $50,000 basis.;c. $20,000 gain, $70,000 basis.;d. $30,000 gain, $70,000 basis.;e. $30,000 gain, $80,000 basis.;1193.,58;Jonathon owns a one-third interest in a liquidating partnership. Immediately;before the liquidation, Jonathon?s basis in the partnership interest is;$60,000. The partnership distributes cash of $32,000 and two parcels of land;(each with a fair market value of $10,000). Parcel A has a basis of $2,000 to;the partnership and Parcel B has a basis of $6,000. Jonathon?s basis in the two;parcels of land is;a.;Parcel A, $2,000, Parcel B, $6,000.;b. Parcel A, $7,000, Parcel B, $21,000.;c. Parcel A, $10,000, Parcel B, $10,000.;d. Parcel A, $14,000, Parcel B, $14,000.;e. Parcel A, $15,000, Parcel B, $45,000.;1194.,59;Michelle receives a proportionate liquidating distribution when the basis of;her partnership interest is $50,000. The distribution consists of $58,000 cash;and noninventory property (adjusted basis to the partnership of $10,000 and;fair market value of $12,000). The partnership has no hot assets. How much gain;or loss does Michelle recognize, and what is her basis in the distributed;property?;a.;$0 gain or loss, $0 basis in property.;b. $0 gain or loss, $50,000 basis in;property.;c. $8,000 ordinary income, $0 basis in;property.;d. $8,000 capital gain, $10,000 basis in;property.;e. $8,000 capital gain, $0 basis in;property.;1195.,60;Jamie owns a 40% interest in the JSD LLC. In liquidation of the entity, Jamie;receives a proportionate distribution of $20,000 cash, inventory (basis of;$12,000 and fair market value of $14,000), and land (basis of $10,000 and fair;market value of $30,000). Jamie?s basis in the entity immediately before the;distribution was $50,000. As a result of the distribution, what is Jamie?s;basis in the inventory and land, and how much gain or loss does she recognize?;a.;$0 basis in inventory, $30,000 basis in land, $0 gain or loss.;b. $12,000 basis in inventory, $18,000;basis in land, $0 gain or loss.;c. $12,000 basis in inventory, $10,000;basis in land, $8,000 loss.;d. $14,000 basis in inventory, $30,000;basis in land, $14,000 gain.;e. $30,000 basis in inventory, $0 basis;in land, $0 gain or loss.;1196.,61;In a proportionate liquidating distribution, Scott receives a distribution of;$20,000 cash, accounts receivable (basis of $0 and fair market value of;$40,000), and land (basis of $30,000 and fair market value of $60,000). In;addition, the partnership repays all liabilities, of which Scott?s share was;$20,000. Scott?s basis in the entity immediately before the distribution was;$100,000. As a result of the distribution, what is Scott?s basis in the;accounts receivable and land, and how much gain or loss does he recognize?;a.;$0 basis in accounts receivable, $30,000 basis in land, $0 gain or loss.;b. $0 basis in accounts receivable;$60,000 basis in land, $0 gain or loss.;c. $40,000 basis in accounts receivable;$30,000 basis in land, $0 gain or loss.;d. $40,000 basis in accounts receivable;$60,000 basis in land, $20,000 gain.;e. $0 basis in accounts receivable;$80,000 basis in land, $20,000 loss.;1197.,62;In a proportionate liquidating distribution, Alexandria receives a distribution;of $70,000 cash, accounts receivable (basis of $0 and fair market value of;$20,000), and land (basis of $30,000 and fair market value of $60,000). In;addition, the partnership repays all liabilities, of which Alexandria?s share;was $40,000. Alexandria?s basis in the entity immediately before the;distribution was $90,000. As a result of the distribution, what is Alexandria?s;basis in the accounts receivable and land, and how much gain or loss does she;recognize?;a.;$0 basis in accounts receivable, $0 basis in land, $20,000 gain.;b. $0 basis in accounts receivable;$30,000 basis in land, $0 gain or loss.;c. $0 basis in accounts receivable, $0;basis in land, $0 gain or loss.;d. $0 basis in accounts receivable;$30,000 basis in land, $0 gain.;e. $20,000 basis in accounts receivable;$0 basis in land, $20,000 gain.;1198.,63;In a proportionate liquidating distribution, Lina receives a distribution of;$10,000 cash, accounts receivable (basis of $0 and fair market value of;$12,000), and inventory (basis of $30,000 and fair market value of $40,000).;Lina?s basis in the entity immediately before the distribution was $80,000. As;a result of the distribution, what is Lina?s basis in the accounts receivable;and inventory, and how much gain or loss does she recognize?;a.;$0 basis in accounts receivable, $30,000 basis in inventory, $40,000 loss.;b. $0 basis in accounts receivable;$70,000 basis in inventory, $0 gain or loss.;c. $0 basis in accounts receivable;$40,000 basis in inventory, $50,000 loss.;d. $12,000 basis in accounts receivable;$30,000 basis in inventory, $28,000 gain.;e. $12,000 basis in accounts receivable;$40,000 basis in inventory, $18,000 gain.;1199.,64;Which of the following statements correctly reflects the rules regarding;proportionate liquidating distributions?;a.;Relief of liabilities is treated as a distribution of cash but only to the;extent that the cash distribution does not exceed the partner?s basis in the;partnership interest.;b. A partner?s basis in distributed;unrealized receivables is the lesser of the partnership?s basis in the;receivables or their fair market value.;c. The basis of unrealized receivables;cannot be stepped up to their fair market value unless the partner has adequate;unabsorbed basis.;d. Assets are deemed distributed in the;following order: cash, unrealized receivables and inventory and finally;capital assets.;e. The partner can recognize gain, but;not loss, on a proportionate liquidating distribution.;1200.,65;Which of the following distributions would never;result in gain recognition to the recipient partner?;a.;A distribution of cash that follows a contribution of appreciated property to;the partnership.;b. A distribution of a slightly;appreciated marketable security.;c. A distribution of property to a;partner who, three years ago, contributed other property with a built-in gain.;d. A distribution to a second partner of;property contributed by the first partner two years ago.;e. A proportionate distribution of;inventory property.;1201.,66;Last year, Darby contributed land (basis of $60,000 and fair market value of;$80,000) to the Seagull LLC in exchange for a 25% interest in the LLC. In the;current year, the LLC distributes the land (now worth $82,000) to Shelby, who;is also a 25% owner. Immediately prior to the distribution, Darby?s basis in;the LLC was $70,000, while Shelby?s basis in the LLC was $110,000. How much;gain or loss must be recognized and by whom? What is Shelby?s basis in the;property she receives and Darby?s basis in her partnership interest following;the distribution?;a.;No gain or loss, Shelby?s basis in the property is $80,000, Darby?s basis in;interest is $70,000.;b. $20,000 gain recognized by Darby;Shelby?s basis in the property is $80,000, Darby?s basis in interest is;$90,000.;c. $22,000 gain recognized by Darby;Shelby?s basis in the property is $82,000, Darby?s basis in interest is;$92,000.;d. $20,000 gain recognized by Shelby;Shelby?s basis in the property is $80,000, Darby?s basis in interest is;$90,000.;e. $22,000 gain recognized by Shelby;Shelby?s basis in the property is $82,000, Darby?s basis in interest is;$92,000.;1202.,67;Last year, Jose contributed nondepreciable property with a basis of $35,000 and;a fair market value of $45,000 to the Starling Partnership in exchange for a;25% interest in the partnership. In the current year, he receives a;nonliquidating distribution from the partnership of other property with a basis;to the partnership of $28,000 and a fair market value of $36,000. The basis in;his partnership interest at the time of the distribution was $30,000. How much;gain or loss does Jose recognize on the distribution? (Assume no other;distributions have been made to Jose, the property he originally contributed is;still owned by the partnership, and this is not a disguised sale transaction.);a.;$0 gain or loss.;b. $2,000 loss.;c. $6,000 gain.;d. $8,000 gain.;e. $10,000 gain.;1203.,68;Which of the following is not;typically considered to be a ?hot asset??;a.;Accounts receivable of a cash basis partnership.;b. Inventory with a basis of $16,000 and;a fair market value of $15,000.;c. Depreciation recapture potential.;d. Land held for development.;e. All of the above are typically;considered to be ?hot assets.?;1204.,69;Tom and Terry are equal owners in the Tatum LLC, a cash basis service entity.;Tatum has unrealized receivables of $400,000 (basis of $0), and no other hot;assets. Goodwill is provided for in the LLC?s operating agreement. If Tatum;distributes cash of $500,000 to Tom in liquidation of his LLC interest, which;of the following statements is incorrect?;a.;This is a disproportionate distribution with respect to hot assets.;b. Any portion of the payment that;relates to LLC goodwill can be deducted by the LLC as a ? 736(a) payment.;c. The payment for Tom?s share of the;LLC?s investment real estate is a ? 736(b) payment.;d. Any ? 736(a) payment will result in;ordinary income to Tom.;e. Any ? 736(b) payment will be treated;as a payment in exchange for Tom?s LLC interest.

 

Paper#59238 | Written in 18-Jul-2015

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