Loretta Contributes Property to a Partnership in Exchange for a 25

question 2

Multiple Choice

Loretta contributes property to a partnership in exchange for a 25 percent partnership interest.The property contributed has a fair market value of $45,000 and a basis of $35,000 on the date of the contribution to the partnership.In addition, Loretta receives a 10 percent partnership interest, valued at $18,000, in exchange for services rendered to the partnership.What is Loretta's basis in her partnership interest, immediately after these transactions?

• A)$35,000
• B)$45,000
• C)$53,000
• D)$63,000
• E)None of the above

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Definitions:

Output Effect

The impact on the total production/output of a firm or economy as a result of changing price levels, often referring to the relationship between price changes and quantity supplied.

Price Effect

The impact on consumer demand and supply resulting from changes in the price of goods or services.

Profit-Maximizing Decision

A profit-maximizing decision is a strategic choice made by businesses to ensure the greatest financial return against costs, optimizing profitability.

Oligopoly Market

A market structure characterized by a small number of large firms dominating the industry, often leading to limited competition, and where the actions of one firm can significantly impact the others.