Tim, Al, and Pat Contributed Assets to Form the Equal

question 70

Multiple Choice

Tim, Al, and Pat contributed assets to form the equal TAP Partnership.Tim contributed cash of $40,000 and land with a basis of $80,000 (fair market value of $60,000) .Al contributed cash of $60,000 and land with a basis of $50,000 (fair market value of $40,000) .Pat contributed cash of $60,000 and a fully depreciated property ($0 basis) valued at $40,000.Which of the following tax treatments is not correct?

• A)Tim's basis in his partnership interest is $120,000.
• B)Al realizes and recognizes a loss of $10,000.
• C)Pat realizes a gain of $40,000 but recognizes $0 gain.
• D)TAP has a basis of $80,000, $50,000, and $0 in the land and property (excluding cash) contributed by Tim, Al, and Pat, respectively.
• E)All of these statement are correct.

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Definitions:

Collectivistic

A cultural orientation that emphasizes the needs, goals, and views of the group over those of the individual.

Cultural Personality

Refers to the aggregate patterns of traits and characteristics observed in individuals within a specific cultural group, influenced by societal norms and values.

Power Distance

A cultural dimension that describes the extent to which less powerful members of organizations and institutions accept and expect that power is distributed unequally.

Big Five Traits

A model in psychology that outlines five broad dimensions of personality: openness, conscientiousness, extraversion, agreeableness, and neuroticism.