Scott Owns a 30% Interest in the Capital and Profits

question 59

True/False

Scott owns a 30% interest in the capital and profits of the SOS Partnership. Immediately before he receives a proportionate nonliquidating distribution from SOS, the basis of his partnership interest is $40,000. The distribution consists of $30,000 in cash and land with a fair market value of $80,000. SOS's adjusted basis in the land immediately before the distribution is $50,000. As a result of the distribution, Scott recognizes no gain or loss and his basis in the land is $10,000.

---

Definitions:

Strategic Considerations

Refers to the planning and decisions that factor in competitive positioning and long-term success of an organization or entity.

Oligopoly

Market in which only a few firms compete with one another, and entry by new firms is impeded.

Market Structure

The organizational and other characteristics of a market, influencing the nature of competition and pricing.

Marginal Revenue Curve

The Marginal Revenue Curve shows how additional income varies as a result of changes in the quantity of a good or service sold, highlighting the incremental earnings generated by selling one more unit.