Paul Sells One Parcel of Land (Basis of $100,000) for Its

question 193

Multiple Choice

Paul sells one parcel of land (basis of $100,000) for its fair market value of $160,000 to a partnership in which he owns a 60% capital interest. Paul held the land for investment purposes. The partnership is in the real estate development business and will build residential housing (for sale to customers) on the land (the land is inventory to the partnership) . Paul will recognize:

• A) $0 gain or loss.
• B) $36,000 ordinary income.
• C) $36,000 capital gain.
• D) $60,000 ordinary income.
• E) $60,000 capital gain.

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Definitions:

Vaginal Probe

An ultrasound device inserted into the vagina to obtain images or information about structures within the pelvis.

Pelvic Ultrasound

A non-invasive diagnostic imaging technique used to visualize organs and structures within the pelvis, such as the uterus, ovaries, and bladder.

Double Contrast

A radiographic technique that uses two contrasting agents (one positive and one negative) to improve image quality in diagnostic imaging.

Crystals

Solid materials whose atoms are arranged in highly ordered, repeating patterns extending in all three spatial dimensions.