Jeremiah Received a Proportionate Nonliquidating Distribution of Land from the JZ

question 50

True/False

Jeremiah received a proportionate nonliquidating distribution of land from the JZ Partnership. The land had a fair market value of $65,000 and a basis to the partnership of $50,000. The land was held for investment purposes by the partnership. Jeremiah's basis in his partnership interest immediately before the distribution was $40,000. The partnership's only remaining assets were cash, another parcel of land, and a building on that land. If the partnership has a § 754 election in effect, it will record a $10,000 step-up; a portion of the step-up will be allocated to the building and will be depreciated; and the step-up and any related depreciation expense will be allocated among all the
partners in the partnership.

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Definitions:

Machine Hours

The cumulative duration during which machines are utilized in the production process, often a factor in costing models.

Contribution Margin

The amount by which sales revenue exceeds variable costs, it's a key figure that helps in assessing the profitability of products or services.

Selling Price

The amount of money charged for a product or service, which can cover costs and provide profit for the seller.

Machine Hours

represent the total time that production equipment or machines are operated within a specific period, often used to allocate manufacturing overhead.