Helmut Contributed Land with a Basis of $5,000 and an FMV

question 100

Multiple Choice

Helmut contributed land with a basis of $5,000 and an FMV of $10,000 to the HG Partnership five years ago to acquire a 50% partnership interest. This year the land is distributed to another partner, Gail, when its FMV is $11,000. No other distributions have been made since Helmut became a partner. When the land is distributed to Gail, Helmut recognizes a gain of

• A) $5,000.
• B) $0.
• C) $2,500.
• D) $3,000.

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Definitions:

Horizontal Intercept

The point at which a curve or line intersects the horizontal axis on a graph, often representing a variable's value when another variable is zero.

Price Of Good 1

The cost at which the first specified good or service is sold in the market.

Budget Line

A graphical representation of all possible combinations of two goods that can be purchased with a given budget at specific prices.

Income Rises

An increase in the amount of money received from work, business, investments, or other sources.