A Partnership Has Accounts Receivable with a Basis of $0

question 43

True/False

A partnership has accounts receivable with a basis of $0 and a fair market value of $30,000 and depreciation recapture potential of $20,000. All other assets of the partnership are either cash, capital assets, or § 1231 assets. If a purchaser acquires a 40% interest in the partnership from another partner, the selling partner will be required to recognize ordinary income of $12,000.

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Definitions:

Conspiracy

A secret plan by a group to do something unlawful or harmful, or the act of creating such plans.

Arson

The criminal act of deliberately setting fire to property, often with malicious intent.

Domestic Slave Trade

The trade of slaves within the borders of a country, such as the internal slave trade in the United States before the Civil War.

Slave Families

Family units that were formed by enslaved individuals under conditions of slavery, often facing forcible separations and restrictions.