Cheryl and Joseph Formed a Partnership

question 4

Multiple Choice

Cheryl and Joseph formed a partnership.Cheryl received a 50% interest in partnership capital and profits in exchange for contributing land with a basis of $140,000 and a fair market value of $300,000.Joseph received a 50% interest in partnership capital and profits in exchange for contributing $300,000 of cash.Three years after the contribution date, the land contributed by Cheryl is sold by the partnership to a third party for $380,000.How much taxable gain will Cheryl recognize from the sale?

• A)$40,000.
• B)$120,000.
• C)$160,000.
• D)$200,000.
• E)None of the above.

Master the skill of rounding numbers to the nearest cent in financial calculations.

Utilize shortcut methods for interest calculation by rounding principals.

Calculate the total amount of a loan including the principal and interest.

Understand the real-world application of interest calculation in loans and investments.

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Definitions:

Reliance

Acting based on trust in something or someone, or in contract law, actions taken based on a promise or agreement.

Contract Modifications

Contract modifications are changes or amendments to the terms of an existing contract, agreed upon by all parties involved.

Independent Consideration

A separate and distinct value or benefit that is provided in return for a contractual promise or action.

Abnormal Subsurface

Relates to unexpected or unusual conditions below the ground surface, often encountered in construction or mining, that can impact the feasibility or the safety of projects.