Tim, Al, and Pat Contributed Assets to Form the Equal

question 17

Multiple Choice

Tim, Al, and Pat contributed assets to form the equal TAP Partnership. Tim contributed cash of $40,000 and land with a basis of $80,000 (fair market value of $60,000) . Al contributed cash of $60,000 and land with a basis of $50,000 (fair market value of $40,000) . Pat contributed cash of $60,000 and a fully depreciated property ($0 basis)
Valued at $40,000. Which of the following tax treatments is not correct?

• A) Tim's basis in his partnership interest is $120,000.
• B) Al realizes and recognizes a loss of $10,000.
• C) Pat realizes a gain of $40,000 but recognizes $0 gain.
• D) TAP has a basis of $80,000, $50,000, and $0 in the land and property (excluding cash) contributed by Tim, Al, and Pat, respectively.
• E) All of these are correct.

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Definitions:

Large Movements

Broad, impactful social, political, or cultural shifts that influence large populations or regions.

Fine Motor Skills

Fine motor skills involve the coordination of small muscles in movements—usually involving the synchronization of hands and fingers—with the eyes.

Small Body Movements

Minor physical actions or gestures, often involuntary, that can be indicative of underlying emotions or intentions.

Motor Skills

The abilities related to the movement and coordination of the body's muscles, including both fine motor skills (small movements, such as writing) and gross motor skills (larger movements, such as walking).