Rashad Contributes a Machine Having a Basis of $30,000 and an FMV

question 46

Multiple Choice

Rashad contributes a machine having a basis of $30,000 and an FMV of $25,000 to a partnership in exchange for a 20% interest in partnership capital, profits, and losses. Prior to the contribution, the partnership had recourse liabilities of $20,000. The partnership assumes a $20,000 recourse liability that is owed by Rashad on the machine. Partners share the economic risk of loss from recourse liabilities in the same way they share partnership losses. Rashad's basis in his partnership interest is

• A)$11,000.
• B)$18,000.
• C)$22,000.
• D)$34,000.

---

Definitions:

Tetrahedral

Tetrahedral refers to a molecular shape where a central atom is surrounded by four other atoms at the corners of a tetrahedron.

Equivalent Atoms

Equivalent atoms are atoms in a molecule that have identical bonding arrangements and environment, making them indistinguishable in chemical reactions.

Acetylene

A colorless, flammable gas used as a fuel and a building block for chemical synthesis.

Molecular Shape

The three-dimensional arrangement of atoms within a molecule, determining its reactivity, polarity, and physical properties.