In a Proportionate Liquidating Distribution in Which the Partnership Is

question 20

True/False

In a proportionate liquidating distribution in which the partnership is also liquidated, Ralph received cash of $30,000, accounts receivable basis of $0, fair market value of $20,000), and land basis of $1,000, fair market value of
$10,000; treated as a capital asset by the partnership). Immediately before the distribution, Ralph's basis in the partnership interest was $40,000. Ralph realizes and recognizes a loss of $9,000, and his basis is $0 in the accounts receivable and $1,000 in the land.

---

Definitions:

Reinvestment Rate Risk

The risk that income from an investment will be reinvested at a lower rate than the original investment.

Time Horizon

The length of time an investor expects to hold an investment before taking money out.

Bond Portfolio Immunization

A strategy to minimize the impact of interest rate fluctuations on the market value of a bond portfolio by matching the portfolio's duration with the investor’s investment horizon.

Price Risk

The risk that the price of a financial asset will fluctuate, affecting the profit or loss of an investment.