Sharon Contributed Property to the Newly Formed QRST Partnership

question 190

Multiple Choice

Sharon contributed property to the newly formed QRST Partnership. The property had a $100,000 adjusted basis to Sharon and a $160,000 fair market value on the contribution date. The property was also encumbered by a $90,000 nonrecourse debt, which was transferred to the partnership on that date. Sharon is treated as a general partner. She is allocated 30% of QRST's profits and 20% of QRST's losses. Sharon's basis in the partnership interest after the formation transaction is:

• A) $28,000.
• B) $37,000.
• C) $88,000.
• D) $118,000.
• E) $127,000.

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Definitions:

Trade-Offs

Decisions made that involve choosing between benefits and drawbacks of different options, reflecting the concept of opportunity cost.

Resources

are assets, materials, or substances that are valuable for their utility in producing goods, providing services, or supporting life.

Esther Duflo

A French-American economist known for her research in development economics and for being the youngest person and the second woman to receive the Nobel Prize in Economic Sciences.

Abhijit Banerjee

An Indian-American economist who, along with Esther Duflo and Michael Kremer, won the Nobel Prize in Economic Sciences in 2019 for their work in development economics.