Identify Which of the Following Statements Is False

question 89

Multiple Choice

Identify which of the following statements is false.

• A)On June 30 of the current year, James Roe sells his interest in the Roe & Doe Partnership for $30,000. Roe's adjusted basis in Roe & Doe at June 30 is $7,500 before apportionment of any partnership income for the current year. The Roe & Doe Partnership uses the calendar year as its tax year and has no liabilities on June 30. Roe's distributive share of partnership income up to June 30 is $22,500. Roe acquired his interest in the partnership five years ago. Roe will have a long-term capital gain on the sale of his interest of $22,500.
• B)Section 751 assets include all inventory and all unrealized receivables in a sale or exchange situation.
• C)When a partnership interest is sold, the buyer and seller can allocate the sale price among the Sec. 751 assets and non-Sec. 751 assets in any reasonable manner.
• D)Statements B and C are true.

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Definitions:

Free Trade

The unrestricted purchase and sale of goods and services between countries without the imposition of constraints such as tariffs, duties and quotas.

Entrepreneurial Ability

The skill to innovate, take risks, and efficiently allocate resources to create and manage a business.

Human Capital

A form of intangible capital that includes the skills and other knowledge that workers have or acquire through education and training and that yields valuable services to a firm over time.

Labor Productivity

The measure of economic output per unit of labor input, often used to gauge the efficiency of a workforce.