Aaron owns a 30% interest in a continuing partnership. The partnership distributes a $35,000 year-end...
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Accounting
Aaron owns a 30% interest in a continuing partnership. The partnership distributes a $35,000 year-end cash payment 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
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