The Tandy Partnership Owns the Following Assets on December 31

question 97

Essay

The Tandy Partnership owns the following assets on December 31:
$\begin{array}{|l|c|c|}\hline \text { Assets } & \text { Basis } & \text { Fair Market Value } \\\hline\text { Cash } & \$ 20,000 & \$ 20,000 \\\text { Unrealized receivables } & 0 & 30,000 \\\text { Inventory } & 20,000 & 25,000 \\\text { Land, Sec. } 1231 \text { property } & \underline{35,000} & \underline{70,000} \\\text { Total } & \$ 75,000 & \$ 145,000 \\\hline\end{array}$
Is the partnership's inventory considered to be substantially appreciated for purposes of Sec. 751? Show your work.

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Definitions:

Labor Supply Curve

A graphical representation showing the relationship between the quantity of labor workers are willing to offer and the wage rate, under ceteris paribus conditions.

Profit-maximizing

The strategy of adjusting input use and production output to achieve the greatest possible profit levels.

Marginal Revenue Product

The additional revenue generated by employing one more unit of a factor, like labor or capital, indicating the value of the marginal product of the factor.

Marginal Resource Cost

The additional cost incurred by using one more unit of a resource in production, contributing to decision-making about resource allocation.