Mark and Addison Formed a Partnership

question 108

Multiple Choice

Mark and Addison formed a partnership.Mark received a 25% interest in partnership capital and profits in exchange for land with a basis of $40,000 and a fair market value of $60,000.Addison received a 75% interest in partnership capital and profits in exchange for $180,000 of cash.Three years after the contribution date, the land contributed by Mark is sold by the partnership to a third party for $76,000.How much taxable gain will Mark recognize from the sale?

• A)$0.
• B)$9,000.
• C)$24,000.
• D)$36,000.
• E)None of the above.

---

Definitions:

Cognition

Cognition encompasses mental processes related to knowledge, understanding, problem-solving, and decision-making.

Acquiring Knowledge

The process of learning or gaining information, skills, or understanding through experience, education, or instruction.

Mental Processes

Internal operations of the mind, including thinking, perceiving, remembering, and decision-making, that underlie behaviors.

Decision Making

The cognitive process of selecting a course of action from among multiple alternatives, typically resulting in a final choice.