A Partnership Will Take a Carryover Basis in an Asset

question 79

Multiple Choice

A partnership will take a carryover basis in an asset it acquires when:

• A)The partnership acquires the asset through a § 1031 like-kind exchange.
• B)A partner owning 25% of partnership capital and profits sells the asset to the partnership.
• C)The partnership leases the asset from a partner on a one-year lease.
• D)The partnership acquires the asset from a partner as a contribution to partnership capital under § 721(a).
• E)None of the above.

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Definitions:

Supply Curves

A graphical representation that shows the relationship between the price of a good or service and the quantity that suppliers are willing to offer for sale at that price, over a given period.

Invisible Hand

A term coined by Adam Smith to describe the self-regulating nature of the marketplace where individuals pursuing their own self-interest lead to the benefit of society at large.

Comparative Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower opportunity cost than its competitors.

Self-Interest

The pursuit of personal advantage and well-being, often driving economic decisions and behaviors.