Question

Ten years​ ago, Latesha acquired a one-third interest in Dana​ Associates, a​ partnership, for​ $26,000 cash. This​ year, Latesha's entire interest in the partnership is liquidated when her basis is​ $24,000. Dana's assets consist of the​ following: cash,​ $20,000; inventory with a basis of​ $46,000 and an FMV of​ $40,000. Dana has no liabilities. Latesha receives the cash of​ $20,000 in liquidation of her entire interest. What is​ Latesha's recognized loss on the liquidation of her interest in​ Dana?A. y B $4,000 short-term capital loss and $2,000 ordinary loss B. $4,000 long-term capital loss C. $4,000 long-term capital loss and $2,000 ordinary lossD. $0.

Answer 1

Answer:

B. $4,000 long-term capital loss

Explanation:

Please see attachment .