Milo Contributes a Building with a Fair Market Value of $400,000

question 23

Multiple Choice

Milo contributes a building with a fair market value of $400,000 to a new partnership in exchange for a 25% interest. His adjusted basis in the building is $125,000, which is subject to a $100,000 mortgage. The partnership assumes the mortgage. What is Milo's basis in his partnership interest?

• A)$50,000
• B)$75,000
• C)$100,000
• D)$125,000
• E)$400,000

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