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

question 69

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

---

Definitions:

Conscientiousness

A personality trait characterized by diligence, carefulness, thoroughness, and a desire to do a good job, often associated with high performance in workplace settings.

Paying Attention

The act of focusing one's mind actively on a particular stimulus or task, maintaining a state of awareness towards specific details or information.

Tolerance

The willingness or ability to accept and respect differences in opinion, behavior, or beliefs without being judgmental.

Uncertainty

A state or condition where there is a lack of certainty, predictability, or clear understanding about an outcome or situation.