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David and Joycelyn form an equal partnership in the current year.No special allocation is provided for in the partnership agreement.During the year David contributes land having a $90,000 basis and a $100,000 FMV in exchange for the initial partnership interest.In addition,the partnership earns $50,000 of ordinary income while partnership liabilities increase from zero to $30,000 by the end of the tax year.The partnership earns $20,000 of tax-exempt interest during the year.David's basis at the end of the current year is
Valuation Model
A systematic approach used to determine the present value of an asset or a company based on expected future cash flows or earnings.
Weighted Average
A statistical measure calculated by multiplying each number in the data set by a predetermined weight and then summing all the products together to find their average, often used in finance for rates or costs.
Free Cash Flow
Free cash flow represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.
Weighted Average
A calculation that considers the varying weights of different items in a dataset, providing a measure that reflects their relative importance.
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