Nick Sells His 25% Interest in the LMNO Partnership to New

question 76

True/False

Nick sells his 25% interest in the LMNO Partnership to new partner Katrina for $67,500. The partnership's assets consist of cash ($100,000), land (basis of $90,000, fair market value of $110,000), and inventory (basis of $40,000, fair market value of $60,000). Nick's basis in his partnership interest was $57,500. On the sale, Nick will recognize ordinary income of $5,000 and a capital gain of $5,000.

---

Definitions:

Individual Interviews

A qualitative research method involving one-on-one conversations between a researcher and a participant to collect in-depth data.

Marine Midland Bank

A former bank based in the United States, which was acquired by HSBC in 1980 and fully integrated under the HSBC brand by 1999.

Savings Accounts

Deposit accounts held at financial institutions that provide principal security and a modest interest rate.

Checking Accounts

Bank accounts that allow customers to deposit and withdraw money, write checks, and use debit cards for transactions.