During the Current Year, Norman Contributed Investment Property Held for Over

question 63

Multiple Choice

During the current year, Norman contributed investment property held for over one year to the Mary Ann Partnership for a 40 percent interest in partnership capital and profits. His tax basis in the property contributed was $8,000, and the property had a fair market value of $10,000 on the date of the contribution to the partnership. What gain or loss should Norman report as a result of the contribution of the property to the partnership in exchange for the 40 percent partnership interest?

• A)No gain or loss
• B)$2,000 long-term capital gain
• C)$2,000 ordinary income
• D)$10,000 long-term capital gain
• E)None of these

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