In 2012, Corporation C Contributed Land (FMV $100,000 and Basis

question 20

Multiple Choice

In 2012, Corporation C contributed land (FMV $100,000 and basis $60,000) to Beta Partnership in exchange for a 25% interest in Beta.In 2012, Beta distributed the land to individual partner P, thereby terminating P's 30% interest in Beta.Immediately prior to distribution, the land was worth $110,000 and P's outside basis in his interest was $200,000.Which of the following is the correct set of tax consequences of the distribution?

• A)There are no consequences to Corporation C.P takes a $200,000 basis in the land.
• B)There are no consequences to Corporation C.P takes a $110,000 basis in the land.
• C)There are no consequences to Corporation C.P takes a $100,000 basis in the land.
• D)Corporation C must recognize a $50,000 gain and increase the basis in its partnership interest by $50,000.P takes a $200,000 basis in the land.
• E)Corporation C must recognize a $40,000 gain and increase the basis in its partnership interest by $40,000.P takes a $200,000 basis in the land.

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Definitions:

Preconscious

Part of the mind that contains thoughts and feelings that are not currently in conscious awareness but can be easily brought to consciousness.

Unconscious

Part of the mind that is not within thought's immediate awareness, influencing behaviors and thoughts without our knowing.

Sense of Self

An individual's perception of their personality traits, physical characteristics, abilities, values, goals, and roles that constitute their identity.

Unique

Being the only one of its kind; without an equal or equivalent; distinctly characteristic.