Randi Owns a 40% Interest in the Capital and Profits

question 58

True/False

Randi owns a 40% interest in the capital and profits of the RAY Partnership.Immediately before she receives a proportionate nonliquidating distribution from RAY, the basis for her partnership interest is $60,000.The distribution consists of $45,000 in cash and land with a fair market value of $72,000.RAY's adjusted basis in the land immediately before the distribution is $36,000.As a result of the distribution, Randi recognizes a gain of $21,000.

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Definitions:

Non Est Factum

A legal defense claiming a person signed a document without understanding its nature due to a fundamental mistake.

Duress

A situation where a person is forced or compelled to act against their will or to enter into a contract due to threats, violence, or other pressure.

Unconscionability

A legal doctrine that describes terms in a contract that are so unjust or overwhelmingly one-sided that they are deemed unenforceable.

Misrepresentation

A false statement of fact made by one party to another, which induces the latter to enter into a contract or agreement.