The Dominguez Partnership has the following assets on December 31: $\begin{array}{lrr}
&\underline{\text { Basis }}&\underline{\text { Fair Market Value }}\
\text { Cash } & \$ 10,000 & \$ 10,000 \
\text { Receivables } & 5,000 & 10,000 \
\text { Inventory } & 20,000 & 30,000
\end{array}$
Antonio is a 20 percent partner and has a $7,000 basis in his partnership interest.The partnership has no liabilities.Antonio receives a liquidating distribution of $10,000 cash.What is the amount and character of the gain or income Antonio recognizes on this liquidating distribution?
A)0
B)$1,000
C)$2,000
D)$3,000

Question

The Dominguez Partnership has the following assets on December 31: $\begin{array}{lrr}
&\underline{\text { Basis }}&\underline{\text { Fair Market Value }}\
\text { Cash } & \$ 10,000 & \$ 10,000 \
\text { Receivables } & 5,000 & 10,000 \
\text { Inventory } & 20,000 & 30,000
\end{array}$
 Antonio is a 20 percent partner and has a $7,000 basis in his partnership interest.The partnership has no liabilities.Antonio receives a liquidating distribution of $10,000 cash.What is the amount and character of the gain or income Antonio recognizes on this liquidating distribution?
A)0
B)$1,000
C)$2,000
D)$3,000

Quizplus · Accepted Answer

The Answer of The Dominguez Partnership has the following assets on December 31: $\begin{array}{lrr}
&\underline{\text { Basis }}&\underline{\text { Fair Market Value }}\
\text { Cash } & \$ 10,000 & \$ 10,000 \
\text { Receivables } & 5,000 & 10,000 \
\text { Inventory } & 20,000 & 30,000
\end{array}$
 Antonio is a 20 percent partner and has a $7,000 basis in his partnership interest.The partnership has no liabilities.Antonio receives a liquidating distribution of $10,000 cash.What is the amount and character of the gain or income Antonio recognizes on this liquidating distribution?
A)0
B)$1,000
C)$2,000
D)$3,000

The Dominguez Partnership Has the Following Assets on December 31