Zoey Contributed Property with a Tax Basis of $25,000 and a Fair

question 42

Multiple Choice

Zoey contributed property with a tax basis of $25,000 and a fair market value of $60,000 to a newly formed partnership in exchange for a 40 percent interest.How much income must Zoey recognize as a result of the transaction?

• A)$60,000
• B)$35,000
• C)$25,000
• D)0

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Definitions:

Night Terrors

Episodes of intense fear that occur during deep (non-REM) sleep, typically in children, characterized by screaming, sweating, confusion, and a heightened heart rate, without memory of the event upon waking.

Restorative Function

A theory proposing that sleep serves to repair and rejuvenate the body and mind, restoring physiological and psychological functions.

Consciousness

The state of being aware of and able to think about one's own existence, sensations, thoughts, surroundings, and experiences.

Non-REM

Describes a type of sleep that is divided into stages, excluding the REM (Rapid Eye Movement) phase, characterized by deeper physical and mental rest.