Question: In 2005, Lisa Bara acquired a one-third interest in Dee Associates, a partnership. In 2010, when Lisas entire interest in the partnership was liquidated, Dees

In 2005, Lisa Bara acquired a one-third interest in Dee Associates, a partnership. In 2010, when Lisa’s entire interest in the partnership was liquidated, Dee’s assets consisted of the following: cash, $20,000 and tangible property with a basis of $46,000 and a fair market value of $40,000. Dee has no liabilities. Lisa’s adjusted basis for her one-third interest was $22,000. Lisa received cash of $20,000 in liquidation of her entire interest. What was Lisa’s recognized loss in 2010 on the liquidation of her interest in Dee?

a. $0.

b. $2,000 short-term capital loss.

c. $2,000 long-term capital loss.

d. $2,000 ordinary loss.

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