In a Proportionate Liquidating Distribution, UVW Partnership Distributes to Partner

question 28

True/False

In a proportionate liquidating distribution, UVW Partnership distributes to partner William cash of $25,000, accounts receivable (basis of $10,000 and fair market value of $8,000), and land (basis of $50,000 and fair market value of $60,000). William's basis was $75,000 before the distribution. On the liquidation, William recognizes no gain or loss, and he takes a basis of $10,000 in the accounts receivable, and $50,000 in the land.

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Definitions:

1899

A year noted for marking the end of the Spanish-American War with the signing of the Treaty of Paris, leading to Spain ceding control of its colonies.

United Fruit Company

An American corporation that had a major influence in the banana industry in Latin America during the 20th century, often criticized for its role in exploiting labor and for its involvement in overthrowing governments.

Central America

A region in the Americas located between Mexico and South America, consisting of seven countries: Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama.