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:

Voltage Regulator

A device within an electrical system that maintains the output voltage at a constant level despite changes in load or input voltage.

Field Current

The electric current that flows through the winding of a generator or motor, generating a magnetic field necessary for their operations.

Brushes

Stationary devices used to conduct current to or from a rotor in electrical components such as alternators and motors.

Slip Rings

Stationary devices used to conduct current to an alternator rotor.