Jamie Decides to Contribute Cash and Property to a Partnership

question 29

Multiple Choice

Jamie decides to contribute cash and property to a partnership she and her friends started. She contributes a building worth $260,000 that has an adjusted basis of $100,000 and she also contributes $40,000 in cash. What is her basis in the partnership?

• A)$100,000
• B)$140,000
• C)$260,000
• D)$300,000
• E)None of these

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Definitions:

Substantial Control

Significant influence or decision-making power over the management and operational policies of an entity, typically through ownership, contractual agreements, or other means.

Employee

An individual who is hired and paid by an employer to perform specific tasks or services.

Lawful Purpose

A requirement for contracts and actions to be valid, indicating that their intentions are not illegal or against public policy.

Restatement of Contracts

A legal publication by the American Law Institute that summarizes the consensus among courts on contract law, serving as a guide to legal decisions but not binding law itself.