Nick and Rodrigo Form the NRC Partnership by Combining the Assets

question 85

Multiple Choice

Nick and Rodrigo form the NRC Partnership by combining the assets of their respective businesses. Nick contributes $10,000 and assets worth $90,000 (adjusted basis of $60,000) for a 1/3 interest. Rodrigo contributes $90,000 and assets worth $270,000 (adjusted basis of $150,000) for a 2/3 interest. NRC also assumes $60,000 of debt on Rodrigo's assets. What is Nick's basis in his partnership interest?

• A)$70,000
• B)$90,000
• C)$100,000
• D)$120,000
• E)$160,000

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Definitions:

Patterns of Behavior

The repeated actions or reactions characterizing an individual or group over a period.

Storming Stage

The second phase in team development, characterized by conflict and competition as team members begin to express their individual perspectives and challenge the group's dynamics.

Team Development

The process of improving the effectiveness of a work group through various stages of growth, skill enhancement, and bonding.

Free Riding

The practice of benefiting from the efforts or resources of others without giving fair contribution or compensation.