Zach's Partnership Interest Basis Is $80,000

question 124

True/False

Zach's partnership interest basis is $80,000.Zach receives a proportionate, liquidating distribution from a liquidating partnership of $60,000 cash and inventory having a basis of $30,000 to the partnership and a fair market value of $26,000.Zach assigns a basis of $20,000 to the inventory and recognizes no gain or loss.

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Definitions:

Amortized Loan

An amortized loan is a loan where the principal is paid down over the life of the loan, typically through equal payments.

Present Value

The equivalent value today of cash flows or a sum of money anticipated in the future, using a predetermined return rate.

Annuity

A financial product that pays out a fixed stream of payments to an individual, primarily used as an income stream for retirees.

Interest Rate

Interest rate is the percentage charged by a lender to a borrower for the use of assets, adjusting for the cost of credit or the return on investment.