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.

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Definitions:

Ethical Dilemma

A situation in which a decision must be made between two or more morally acceptable or unacceptable alternatives.

Ethical Behaviour

Conduct that is in line with accepted moral norms and values, often characterized by honesty, fairness, and integrity.

Ethical Issues

Moral challenges that arise in professional and personal contexts, requiring individuals or organizations to choose actions that align with ethical standards.

Global Context

The consideration of the larger international or worldwide environment in decisions, strategies, and operations.