Helmut Contributed Land with a Basis of $5,000 and an FMV

question 100

Multiple Choice

Helmut contributed land with a basis of $5,000 and an FMV of $10,000 to the HG Partnership five years ago to acquire a 50% partnership interest. This year the land is distributed to another partner, Gail, when its FMV is $11,000. No other distributions have been made since Helmut became a partner. When the land is distributed to Gail, Helmut recognizes a gain of

• A) $5,000.
• B) $0.
• C) $2,500.
• D) $3,000.

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Definitions:

Professional Gambling

The act of wagering money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money or material goods professionally.

Dependent

Typically refers to someone who relies on another, especially for financial support, such as a child or spouse supported by a family's primary earner.

Liquidates

the process of converting assets into cash or other liquid assets, often associated with closing a business or settling debts.

Fraudulent Misrepresentation

A false statement knowingly made to induce another party to enter into a contract, resulting in harm.