Paul Sells One Parcel of Land (Basis of $100,000) for Its

question 193

Multiple Choice

Paul sells one parcel of land (basis of $100,000) for its fair market value of $160,000 to a partnership in which he owns a 60% capital interest. Paul held the land for investment purposes. The partnership is in the real estate development business and will build residential housing (for sale to customers) on the land (the land is inventory to the partnership) . Paul will recognize:

• A) $0 gain or loss.
• B) $36,000 ordinary income.
• C) $36,000 capital gain.
• D) $60,000 ordinary income.
• E) $60,000 capital gain.

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Definitions:

Disorganized Thinking

A state where an individual has trouble organizing their thoughts, often leading to difficulties communicating or making decisions.

Prefrontal Cortex

The part of the brain located at the front of the frontal lobes, instrumental in planning complex cognitive behaviors, personality expression, decision making, and moderating social behavior.

Monoamine Oxidase Inhibitors (MAOIs)

A class of antidepressant drugs that work by inhibiting the activity of monoamine oxidase, thereby increasing the levels of certain neurotransmitters in the brain.

Neurotransmitter Reuptake

The process by which neurotransmitters are reabsorbed by the nerve cell that released them, helping to terminate the signal between neurons.