The LMO Partnership Distributed $30,000 Cash to Emma in a Proportionate

question 31

True/False

The LMO Partnership distributed $30,000 cash to Emma in a proportionate, nonliquidating distribution.Emma's basis in her partnership interest was $25,000 immediately before the distribution.As a result of the distribution, Emma's basis is reduced to $0 and she recognizes a $5,000 gain.

---

Definitions:

Strict Product Liability

A legal doctrine that holds sellers, distributors, or manufacturers liable for distributing a defective product to a consumer.

Defect Unexpectedly

A situation where a flaw or imperfection in a product or system appears without warning.

Warning Defect

A failure in a product to adequately instruct or inform users of potential risks or hazards, rendering it dangerous.

Manufacturer

An entity or individual that produces goods or products from raw materials through the use of labor, machinery, and equipment.