Identify Which of the Following Statements Is False

question 89

Multiple Choice

Identify which of the following statements is false.

• A)On June 30 of the current year, James Roe sells his interest in the Roe & Doe Partnership for $30,000. Roe's adjusted basis in Roe & Doe at June 30 is $7,500 before apportionment of any partnership income for the current year. The Roe & Doe Partnership uses the calendar year as its tax year and has no liabilities on June 30. Roe's distributive share of partnership income up to June 30 is $22,500. Roe acquired his interest in the partnership five years ago. Roe will have a long-term capital gain on the sale of his interest of $22,500.
• B)Section 751 assets include all inventory and all unrealized receivables in a sale or exchange situation.
• C)When a partnership interest is sold, the buyer and seller can allocate the sale price among the Sec. 751 assets and non-Sec. 751 assets in any reasonable manner.
• D)Statements B and C are true.

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Definitions:

Executed Contract

An agreement that has been fully performed by all parties involved, fulfilling all obligations specified in the contract.

Clickwrap Contracts

Agreements where acceptance is signaled by the user clicking an "I accept" button on a website, commonly used in software licenses and online transactions.

Shrinkwrap Contracts

Agreements whose terms are only revealed after opening the packaging of a product, often enforceable once the package is opened.

Duress

A condition where a person performs an act as a result of violence, threat, or other pressure against them, raising questions about the voluntariness of the act.