Kathy Purchases a One-Third Interest in the KDP Partnership from Paul

question 11

Multiple Choice

Kathy purchases a one-third interest in the KDP Partnership from Paul for $60,000. Just prior to the sale, Paul's outside and inside bases in KDP are $48,000. KDP's balance sheet includes the following: If KDP has a §754 election in place, what is Kathy's special basis adjustment?

• A)$0.
• B)$36,000.
• C)$12,000.
• D)None of the choices are correct.

---

Definitions:

Past Participle

A grammatical form of a verb used in forming perfect and passive tenses and sometimes as an adjective.

Fire Stations

Facilities that house firefighters and their equipment, serving as a base for responding to fires and emergencies.

Livermore

A city in California, known for its wineries, technology firms, and the Lawrence Livermore National Laboratory.

Past Participle

A verb form typically used in perfect tenses and passive voice, often ending in -ed, -en, -d, -t, or -n.