Sue and Andrew Form SA General Partnership

question 124

Multiple Choice

Sue and Andrew form SA general partnership. Each person receives an equal interest in the newly created partnership. Sue contributes $10,000 of cash and land with an FMV of $55,000. Her basis in the land is $20,000. Andrew contributes equipment with an FMV of $12,000 and a building with an FMV of $33,000. His basis in the equipment is $8,000, and his basis in the building is $20,000. How much gain must the SA general partnership recognize on the transfer of these assets from Sue and Andrew?

• A)$0
• B)$4,000
• C)$48,000
• D)$52,000

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Definitions:

Ethical Imperative

A strong moral obligation or duty which compels someone to act in a certain way based on ethical considerations.

Rational Agents

Entities capable of making decisions based on reasoning, often in the context of economic models or artificial intelligence.

Intrinsic Worth

This refers to the inherent value that an entity has, independent of its utility or benefit to others.

Means to End

A method or action carried out for the purpose of achieving a specific goal or outcome.