Emma Contributes Property Having a $24,000 FMV and a $15,000

question 82

Multiple Choice

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.

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Definitions:

Ethical Values

Fundamental beliefs that guide behaviors and decision-making processes based on notions of what is right and wrong.

Norms

Are rules or standards for the behavior of group members.

Normative Theory

A theoretical framework that prescribes how things should or ought to be, often used in ethical, political, or policy debates.

Ethical Problems

Dilemmas or situations that require a choice between options that are or appear to be, ethically wrong or right.