Loretta Contributes Property to a Partnership in Exchange for a 25

question 16

Multiple Choice

Loretta contributes property to a partnership in exchange for a 25 percent partnership interest. The property contributed has a fair market value of $45,000 and a basis of $35,000 on the date of the contribution to the partnership. In addition, Loretta receives a 10 percent partnership interest, valued at $18,000, in exchange for services rendered to the partnership. What is Loretta's basis in her partnership interest, immediately after these transactions?

• A)$35,000
• B)$45,000
• C)$53,000
• D)$63,000
• E)None of these

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Definitions:

Population Growth Rates

The rate at which the number of individuals in a population increases in a given time period as a result of birth rate, death rate, and net migration.

Industrialization

The process of transforming economies from primarily agricultural to one based on the manufacturing of goods, typically leading to economic growth and development.

Capital Resources

Assets such as machinery, buildings, and equipment used to produce goods and services.

Per Capita Income

The per capita income in a particular area or country, found by taking the total revenue generated in that area and dividing it by the population size.