The AB Partnership has a machine with an FMV of $25,000 and a basis of $20,000. The partnership has taken an $8,000 depreciation on the machine. The unrealized receivable related to the machine is
A)$0.
B)$5,000.
C)$8,000.
D)$20,000.

Question

Quizplus · Accepted Answer

The unrealized receivable is calculated by subtracting the basis of the asset from the fair market value. In this case, $25,000 - $20,000 = $5,000. The depreciation taken does not affect the calculation of the unrealized receivable.

The AB Partnership Has a Machine with an FMV of $25,000