The MBA Partnership Makes a § 736b) Cash Payment of $20,000

question 101

True/False

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

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Definitions:

Infinite Projections

Speculative forecasts that extend indefinitely into the future, often used in theoretical models and not typically applicable in practical financial analysis.

Modified Accelerated Cost Recovery System (MACRS)

A method of depreciation used for tax purposes in the United States, allowing businesses to recover investments in certain property through deductions over a specified life.

Equipment

Tangible physical assets used in the operation of a business, such as machinery, computers, or tools.

Buildings

Structures that are constructed for residency, business, storage, or other purposes, recognized as fixed assets on a balance sheet.