Sue and Andrew Form SA General Partnership

question 124

Multiple Choice

Sue and Andrew form SA general partnership. Each person receives an equal interest in the newly created partnership. Sue contributes $10,000 of cash and land with an FMV of $55,000. Her basis in the land is $20,000. Andrew contributes equipment with an FMV of $12,000 and a building with an FMV of $33,000. His basis in the equipment is $8,000, and his basis in the building is $20,000. How much gain must the SA general partnership recognize on the transfer of these assets from Sue and Andrew?

• A)$0
• B)$4,000
• C)$48,000
• D)$52,000

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Definitions:

Chemical Engineer

A professional who applies principles of chemistry, physics, and engineering to design and implement processes for producing, transforming, and transporting materials.

Small Discrepancy

a minor difference or deviation from what is expected, generally not sufficient to cause concern.

Auto-motive Theory

The theory suggesting that motivations can be automatically triggered by environmental cues without conscious intention.

Goal-related Stimuli

External cues or information that can influence motivation and action toward achieving a goal.