51 emma contributes property having a 24 000 fmv and a 15 000 adjusted basis and als 4312615

51 emma contributes property having a 24 000 fmv and a 15 000 adjusted basis and als 4312615

51) Emma contributes property having a $24,000 FMV and a $15,000 adjusted basis and also renders legal services valued at $22,000 in exchange for a 30% interest in the capital and profits of the ABC partnership. The tax results to Emma will be

A) no income is recognized and a partnership basis of $37,000.

B) ordinary income of $22,000 and a partnership basis of $37,000.

C) ordinary income of $22,000 and a partnership basis of $46,000.

D) no income is recognized and a partnership basis of $46,000.

52) Chen contributes a building worth $160,000 (adjusted basis $180,000) and $40,000 in services to a partnership for a partnership interest. Chen's basis in the partnership interest is

A) $160,000.

B) $180,000.

C) $200,000.

D) $220,000.

53) Hunter contributes property having a $75,000 FMV and a $65,000 adjusted basis which is subject to a $36,000 mortgage in exchange for a one-fourth interest in the ABC Partnership. The partnership owes no other debts, but does assume this mortgage. Profits and losses are shared equally and each partner has a one-fourth interest in partnership capital. Hunter's basis in the partnership is

A) $38,000.

B) $48,000.

C) $74,000.

D) $84,000.

54) Felicia contributes property with a FMV of $48,000 (adjusted basis $36,000) for a one-third interest in the partnership. The property is subject to a $24,000 mortgage. Betty (a one-third partner after Felicia's contribution) has an increase in her basis in the partnership of

A) $0.

B) $4,000.

C) $8,000.

D) $12,000.

55) Edith contributes land having $100,000 FMV and a $85,000 adjusted basis, which is subject to a $66,000 mortgage in exchange for a one-third interest in the EHK Partnership. The partnership owes no other liabilities. After the contribution, Kate, Edith, and Helen share profits and losses equally and each has a one-third interest in the partnership capital. Assume that Kate has a basis in her partnership interest of $50,000 before Edith's contribution to the partnership. The effect of Edith's contribution on partner Kate's basis is to

A) decrease Kate's basis to $28,000.

B) increase Kate's basis to $72,000.

C) increase Kate's basis to $77,000.

D) No effect on Kate's basis.

56) John contributes land having $110,000 FMV and a $90,000 adjusted basis which is subject to a $60,000 mortgage in exchange for a one-third interest in the AJK Partnership. The partnership owes no other liabilities. After the contribution, Abby, John, and Kent share profits and losses equally and each has a one-third interest in the partnership capital. John's basis in the partnership interest is

A) $50,000.

B) $90,000.

C) $110,000.

D) $150,000.

57) Patrick acquired a 50% interest in a partnership by contributing property that had an adjusted basis of $8,000 and a fair market value of $29,000. The property was subject to a liability of $22,000, which the partnership assumed for legitimate business purposes. Which of the following statements is correct?

A) Patrick will be required to recognize a $3,000 gain due to the negative basis rules and will have a basis in his partnership interest of zero.

B) Patrick will not be required to recognize a gain on his return and will have a basis in his partnership interest of negative $3,000.

C) Patrick will be required to recognize a $21,000 gain due to the negative basis rules and will have a basis in his partnership interest of zero.

D) Patrick will not be required to recognize a gain on his return but the realized gain will increase the basis of his partnership interest.

58) Hal transferred land having a $160,000 FMV and a $75,000 adjusted basis which is subject to a $150,000 mortgage in exchange for a one-third interest in the HEF Partnership.  Hal acquired the land ten years ago. The partnership owes no other liabilities. Hal, Ellen, and Felix share profits and losses equally and each has an one-third interest in partnership capital. Hal's basis in the one-third partnership interest is

A) $0.

B) ($25,000).

C) $75,000.

D) $85,000.

59) Lance transferred land having a $180,000 FMV and a $105,000 adjusted basis, which is subject to a $150,000 mortgage in exchange for a one-third interest in the Trois Partnership.  Lance acquired the land in 2002. The partnership owes no other liabilities. Lance, Rhonda, and Zach share profits and losses equally and each has an one-third interest in partnership capital. The tax effect to Lance is

A) no gain or loss recognized.

B) recognized gain of $45,000 on the transfer.

C) recognized gain of $75,000 on the transfer.

D) recognized loss of $45,000 on the transfer.

60) David transferred land having a $150,000 FMV and a $45,000 adjusted basis, which is subject to a $110,000 mortgage in exchange for a one-third interest in the DSF Partnership.  David had purchased the land in 2010.  The partnership owes no other liabilities. David, Austin, and Alison share profits and losses equally and each has a one-third interest in partnership capital. The partnership's holding period for the land transferred by partner David commences in

A) 2010.

B) 2011.

C) 2012.

D) The holding period is the same number of years that the partnership has been in existence.

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