Rocky and Charlie Form RC Partnership as Equal Partners

question 43

Multiple Choice

Rocky and Charlie form RC Partnership as equal partners.Rocky contributes $100,000 into RC while Charlie contributes real estate with a cost and fair market value of $100,000.During the current year,RC earned net income of $600,000.The partnership distributes $200,000 to each partner.The amount that Rocky should report on his individual tax return is

• A)$0.
• B)$100,000.
• C)$200,000.
• D)$300,000.

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Definitions:

Binding Price Ceiling

A government-imposed limit on the price of a good or service that is below the market equilibrium price, leading to shortages.

Hybrid Cars

Vehicles powered by a combination of an internal combustion engine and one or more electric motors, using less fuel and emitting fewer pollutants than traditional cars.

Rent Controls

Government-imposed limitations on the amount landlords can charge for leasing a property.

Equilibrium Price

The price at which the quantity of a good demanded equals the quantity supplied.