Zoey Contributed Property with a Tax Basis of $25,000 and a Fair

question 42

Multiple Choice

Zoey contributed property with a tax basis of $25,000 and a fair market value of $60,000 to a newly formed partnership in exchange for a 40 percent interest.How much income must Zoey recognize as a result of the transaction?

• A)$60,000
• B)$35,000
• C)$25,000
• D)0

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Definitions:

Kin

Family members or relatives, typically those related by blood.

Non-Kin

Refers to individuals or entities that are not related by blood or family ties.

Hurricane

A powerful tropical storm characterized by strong winds, heavy rainfall, and can lead to significant destruction.

Gene Investment Theory

A theory suggesting that individuals are predisposed to invest resources and efforts into offspring and relatives to ensure the transmission of their genes to future generations.