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Etta transfers property with an adjusted basis of $60,000 in exchange for a 50% partnership interest.The property is subject to a $70,000 mortgage which the partnership will assume.The partnership has no other liabilities.Etta will recognize a $10,000 gain on the exchange due to the negative basis limitation.
Long-Term Debt
Loans and financial obligations lasting over one year that are used to finance a company's operations.
Book Value
The value of an asset according to its balance sheet account balance, subtracting any liabilities or depreciation.
Depreciation
In accounting, a process for allocating a physical asset's cost over the duration of its effective life.
Net Liquid
Refers to the amount of cash or cash-equivalents a company or individual has after accounting for all liabilities.
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