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.

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Definitions:

Listener Memory

Listener memory pertains to the capacity of an audience to retain and recall information that has been communicated to them auditorily.

Objects

Physical items that are tangible and can be seen or touched.

Visual Aid

Use of imagery or physical objects to support or clarify a presentation or message.

Line Graph

A type of chart used to display information as a series of data points connected by straight line segments, often used to track changes over time.