Rashad Contributes a Machine Having a Basis of $30,000 and an FMV

question 69

Multiple Choice

Rashad contributes a machine having a basis of $30,000 and an FMV of $25,000 to a partnership in exchange for a 20% interest in partnership capital, profits, and losses. Prior to the contribution, the partnership had recourse liabilities of $20,000. The partnership assumes a $20,000 recourse liability that is owed by Rashad on the machine. Partners share the economic risk of loss from recourse liabilities in the same way they share partnership losses. Rashad's basis in his partnership interest is

• A) $22,000.
• B) $34,000.
• C) $18,000.
• D) $11,000.

---

Definitions:

Know Your Audience

The process of understanding the characteristics, expectations, and preferences of the target audience to effectively communicate or present information.

Freewrite

A writing strategy where a person writes continuously for a set period without worrying about spelling or grammar, to generate ideas.

Mind Map

A visual, holistic form of note taking that starts with the main idea placed in the center of a page and branches out with subtopics through associations and patterns.

Writing Pyramid

A structured approach to writing that organizes information hierarchically, starting with the broadest topic at the base and becoming more specific towards the top.