The SSC Partnership Balance Sheet Includes the Following Assets on December

question 69

Multiple Choice

The SSC Partnership balance sheet includes the following assets on December 31 of the current year: $$\begin{array} { | l | r | r | } \hline & \text { Basis } & \text { FMV } \\\hline \text { Cash } & \$ 180,000 & \$ 180,000 \\\hline \text { Accounts receivable } & - 0 - & 60,000 \\\hline \text { Equipment (cost } = \$ 100,000 \text { ) } & 40,000 & 50,000 \\\hline \text { Land } & 90,000 & 120,000 \\\hline \text { Total } & \$ 310,000 & \$ 410,000 \\\hline\end{array}$$ Which of SSC's assets are considered hot assets under §751(a) ?

• A) Cash and accounts receivable.
• B) Cash and land.
• C) Accounts receivable and land.
• D) Accounts receivable and inherent recapture under §1245 in the equipment.

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Definitions:

Vertical Merger

A merger between companies in the same industry but at different stages of production or distribution process.

Horizontal Merger

A horizontal merger is a business consolidation that occurs between firms who operate in the same industry, often leading to synergies, increased market share, and potentially higher market power.

Conglomerate Merger

A merger between firms that operate in entirely different industries, often aimed at diversification and risk reduction.

Trust

A legal arrangement where one party holds assets on behalf of another, or confidence in the reliability and integrity of a person or entity.