The MBC Partnership Makes a § 736(b)cash Payment of $50,000

question 75

True/False

The MBC Partnership makes a § 736(b)cash payment of $50,000 to partner Betty in liquidation of her interest in the partnership.The partnership owns no hot assets.Betty's basis in her partnership interest before the distribution was $20,000.If the partnership has a § 754 election in effect,it will record a $30,000 decrease in its inside basis in partnership assets,allocable to the remaining partners in the partnership.

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Definitions:

LIFO Liquidations

A situation where older inventory, costed at historical prices, is sold, potentially leading to an inflated profit margin due to lower cost of goods sold.

Interim Report

A financial statement covering a period of less than one fiscal year that provides updates on a company's performance and financial position between annual reports.

Operating Results

The outcome of a company's core business operations, indicating profitability or loss over a certain period.

Fiscal Year

A 12-month period used by governments and businesses for accounting purposes, which may or may not align with the calendar year.