Brooke and John Formed a Partnership

question 103

Multiple Choice

Brooke and John formed a partnership. Brooke received a 40% interest in partnership capital and profits in exchange for contributing land (basis of $30,000 and fair market value of $120,000) . John received a 60% interest in partnership capital and profits in exchange for contributing $180,000 of cash. Three years after the contribution date, the land contributed by Brooke is sold by the partnership to a third party for $150,000. How much taxable gain will Brooke recognize from the sale?

• A) $102,000
• B) $90,000
• C) $48,000
• D) $36,000
• E) $0

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