Nina and Sue Form an Equal Partnership During the Current

question 68

True/False

Nina and Sue form an equal partnership during the current year.Nina contributes cash of $100,000,and Sue contributes property (adjusted basis of $40,000,fair market value of $250,000)subject to a nonrecourse liability of $150,000.As a result of these transactions,Sue has a recognized gain of $35,000 and a basis in her partnership interest of $75,000.

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Definitions:

Straight Life Insurance

Insurance that requires the payment of premiums throughout the life of the insured and pays the beneficiary the face value of the policy upon the insured’s death.

Face Value

The nominal or original value printed on a security or financial instrument, such as a bond or stock certificate.

Lapse Policy

A situation where an insurance policy becomes inactive because premiums have not been paid.