Test:CPA Regulation (REG)

1.

Slate’s basis in Arch Partnership was $70,000 at the time he received a nonliquidating distribution of partnership capital assets. These capital assets had an adjusted basis of $65,000 to Arch and a fair market value of $83,000. Arch had no unrealized receivables, appreciated inventory, or properties that had been contributed by its partners. What was Slate’s recognized gain or loss in the distribution?

$5,000 capital loss

$13,000 capital gain

$0

$18,000 ordinary income

1/3 questions

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