Michael Contributes Land with a Value of $120,000 and a Basis

question 151

True/False

Michael contributes land with a value of $120,000 and a basis of $80,000 to the MNO Partnership in exchange for a 1/4 interest.Several months later,the partnership sells the land for $140,000.Of the gain on the land sale,$45,000 is allocated to Michael.

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Definitions:

Oxidation State

A numerical value that signifies the total electrons an atom gains or sheds to establish a chemical bond with a different atom.

Reduction

A chemical reaction in which a molecule gains electrons, often accompanied by a decrease in oxidation state.

Chemical Equation

A symbolic representation of a chemical reaction, with reactants on the left, products on the right, and an arrow indicating the direction of the reaction.

Iron

A strong, hard magnetic silvery-grey metal, very abundant in the earth's crust and the core element of hemoglobin in blood.