Dylan, Luke, and Hannah Form a Partnership

question 48

Multiple Choice

Dylan, Luke, and Hannah form a partnership.Dylan contributes land with a fair market value of $25,000 (basis of $15,000) in exchange for a 25% interest.Luke contributes equipment with a $35,000 fair market value (basis of $38,000) in exchange for a 35% interest, and Hannah contributes a building with a $100,000 fair market value (basis = $35,000) and a mortgage of $60,000 (assumed by the partnership) in exchange for a 40% interest.What is Hannah's basis in her partnership interest?

• A)$0
• B)$1,000
• C)$5,000
• D)$65,000

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Definitions:

FADH2

A reduced form of flavin adenine dinucleotide, a coenzyme involved in the respiratory chain that transfers electrons.

ATP

Adenosine triphosphate, a molecule that carries energy within cells for metabolism.

NADH

Nicotinamide adenine dinucleotide (NADH) serves as a crucial coenzyme in the cellular energy production process, participating in redox reactions by carrying electrons from one reaction to another.

Electron Transport Chain

A series of protein complexes located in the inner membrane of mitochondria that facilitate the movement of electrons to generate ATP.