Feela is a one-third partner in Alchemy LLC, which is taxed as a partnership. Her basis prior

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Feela is a one-third partner in Alchemy LLC, which is taxed as a partnership. Her basis prior to Alchemy paying Feela a $11,000 cash distribution is $27,000. How much income does Feela recognize from the distribution and what is her basis in Alchemy after the distribution? 

a. $11,000 income and $27,000 basis 

b. $0 income and $16,000 basis 

c. $11,000 income and $16,000 basis 

d. $0 income and $27,000 basis 

e. None of these choices

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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Income Tax Fundamentals 2019

ISBN: 9781337703062

37th Edition

Authors: Gerald E. Whittenburg, Steven Gill

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