Patrick Purchased a One-Third Interest in the PPP Partnership for $600,000

question 27

Multiple Choice

Patrick purchased a one-third interest in the PPP partnership for $600,000. At the time of the purchase, the partnership had a 754 election in effect and its only asset was land with a basis of $1,500,000. This year, PPP sells the land for $1,800,000. What is Patrick's recognized share of the gain on the sale of the land?

• A)$0
• B)$100,000
• C)$300,000
• D)none of the above

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Definitions:

Profit

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Unethical Behaviors

Actions or practices that violate moral principles or standards within a profession, organization, or society.

Leadership Level

The different tiers or stages of leadership within an organization, typically characterized by varying responsibilities, skills, and influence.

Layoffs

The act of terminating employees, often for reasons unrelated to personal performance, such as economic downturns or company restructuring.