On July 1, Alexandra Contributes Business Equipment (Which She Had

question 733

Multiple Choice

On July 1, Alexandra contributes business equipment (which she had purchased two years ago) having a $45,000 FMV and a $40,000 adjusted basis to the AX Partnership in exchange for a 25% interest in the capital and profits. The basis of Alexandra's partnership interest is

• A) $40,000.
• B) $5,000.
• C) $45,000.
• D) None of the above.

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Definitions:

Intramembranous Ossification

A process by which bone tissue is formed directly from fibrous connective tissue, playing a crucial role in the development of flat bones like those of the skull.

Cartilage Models

Represents a phase in endochondral ossification where cartilage is eventually replaced by bone.

Skull

The bony structure forming the head, protecting the brain, and supporting the structures of the face.

Endochondral

Pertaining to the process by which bone tissue is created from cartilage, a critical path in the formation of the skeletal system of vertebrates.