David and Joycelyn Form an Equal Partnership in the Current

question 2203

Multiple Choice

David and Joycelyn form an equal partnership in the current year. No special allocation is provided for in the partnership agreement. During the year David contributes land having a $90,000 basis and a $100,000 FMV in exchange for the initial partnership interest. In addition, the partnership earns $50,000 of ordinary income while partnership liabilities increase from zero to $30,000 by the end of the tax year. The partnership earns $20,000 of tax- exempt interest during the year. David's basis at the end of the current year is

• A) $130,000.
• B) $140,000.
• C) $125,000.
• D) $115,000.

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Definitions:

Dance Theater of Harlem

A renowned ballet company and school based in New York City, known for being one of the first African-American ballet companies in the world.

Ballet Corps

The group of dancers in a ballet company who perform together and are not soloists, often synchronizing movements in ensemble work.

Dance Theater of Harlem

A renowned American ballet company and school that promotes diversity in the performance arts, founded in New York City in 1969.

Dance Theater of Harlem

An American professional ballet company and school based in Harlem, New York, known for its inclusive policy for diverse dancers.