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:

Altruistic Suicide

Suicide committed by people who intentionally sacrifice their lives for the well-being of society.

Higher Good

An ethical or philosophical concept that refers to the ultimate value or purpose of actions, often associated with the greatest well-being for the greatest number of people or the realization of personal virtues.

Sociocultural Model

The theoretical perspective that emphasizes the effects of society, culture, and social and family groups on individual behavior.

Cognitive-Behavioral

A psychological approach that addresses dysfunctional emotions, behaviors, and cognitions through a goal-oriented, systematic procedure.