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

question 82

Multiple Choice

Patrick purchases a one-third interest in the PPP partnership for $600,000. The partnership has assets with a value of $1,500,000. PPP has a 754 election in effect. What is the amount of the basis adjustment?

• A)$0
• B)$300,000 increase in the basis of partnership assets
• C)$100,000 increase in Patrick's basis in the partnership assets
• D)$100,000 increase in Patrick's share of the basis in the partnership assets

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Definitions:

Roundworm

Invertebrates with nonsegmented cylindrical body covered by a cuticle that molts; some forms are free-living in water and soil, and many are parasitic.

Freshwater Hydra

A small, tentacled, aquatic organism found in freshwater, known for its extraordinary ability to regenerate.

Medusa

Among cnidarians, bell-shaped body form that is directed downward and contains much mesoglea.

Polyp

Among cnidarians, body form that is directed upward and contains much mesoglea. In anatomy: small, abnormal growth that arises from the epithelial lining.