The XYZ Partnership Owns the Following Assets on December 31

question 49

Multiple Choice

The XYZ Partnership owns the following assets on December 31:
$\begin{array}{|l|l|l|} \hline& \text { Basis } & \text { FMV } \\\hline \text { Cash } & \$ 20,000 & \$ 20,000 \\\hline \text { Unrealized receivables } & 0 & \mathbf{1 5 , 0 0 0} \\\hline \text { Inventory } & \$ 30,000 & 35,000 \\\hline \text { Land (Sec. 1231 asset) } & 40,000 & 70,000\\\hline\end{array}$ By how much must XYZ reduce its unrealized receivables to avoid meeting the substantially apprec inventory test?

• A) $10,000
• B) $15,000
• C) $14,000
• D) No amount of reduction of unrealized receivables will affect meeting the substantially appreciated inventory test.

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Definitions:

Eye Contact

The act of looking directly into another individual's eyes, which is an important element of non-verbal communication and can convey various messages and emotions.

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A long-term negative perception of oneself, marked by persistent feelings of inadequacy and lack of self-worth.

Alcohol Abuse

The excessive or inappropriate consumption of alcohol leading to physical or mental health issues.

Social Isolation

The condition in which an individual lacks interaction or contact with other people over a significant period.