Question

Stump Grinders Partnership holds cash and inventory (basis $50,000, market value = $55,000) and makes a liquidating distribution of only cash to Ginny. This distribution is a

Answer 1

The distribution made by the Stump Grinders Partnership to Ginny is a cash distribution.

Step-by-step explanation:

The distribution made by the Stump Grinders Partnership to Ginny is a cash distribution. A liquidating distribution is a payment made by a partnership to its partners in order to close the business and distribute its assets. In this case, the partnership is making a distribution of only cash to Ginny. The fact that the inventory is not being distributed indicates that only the cash is being distributed to her.