Nick Sells His 25% Interest in the LMNO Partnership to New

question 76

True/False

Nick sells his 25% interest in the LMNO Partnership to new partner Katrina for $67,500. The partnership's assets consist of cash ($100,000), land (basis of $90,000, fair market value of $110,000), and inventory (basis of $40,000, fair market value of $60,000). Nick's basis in his partnership interest was $57,500. On the sale, Nick will recognize ordinary income of $5,000 and a capital gain of $5,000.

---

Definitions:

ATP Synthase

An enzyme located in the membrane of mitochondria that helps in the synthesis of ATP (adenosine triphosphate) from ADP and phosphate during cellular respiration.

Hydrogen Ions

Positively charged ions of hydrogen, crucial in determining the acidity or alkalinity of solutions.

Diagram

A simplified drawing showing the appearance, structure, or workings of something, typically used for explanation purposes.

Space

The vast, seemingly infinite expanse that exists beyond Earth's atmosphere, consisting of other celestial bodies, stars, and galaxies.