For a 30% Interest in Partnership Capital, Profits, and Losses

question 80

Multiple Choice

For a 30% interest in partnership capital, profits, and losses, Carol contributes a machine with a basis of $40,000 and an FMV of $80,000. The partnership assumes a $70,000 recourse liability on the machine. At the time of the contribution, the partnership had recourse liabilities of $10,000. Partners share the economic risk of loss from recourse liabilities in the same way they share partnership losses. Following the contribution, Carol has

• A)a capital loss due to the contribution of $6,000 and a zero basis in the partnership interest.
• B)a capital gain due to the contribution of $6,000 and a zero basis in the partnership interest.
• C)a $34,000 basis in the partnership interest and no gain or loss.
• D)a $43,000 basis in the partnership interest and no gain or loss.

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Definitions:

Religious Leaders

Individuals recognized within a religion for their authority and leadership in spiritual matters.

Significantly Depressed

Significantly depressed refers to a state of major depression where an individual experiences profound feelings of sadness, hopelessness, and a lack of interest in life, affecting daily functioning.

Caregivers

Individuals who provide care or assistance to others who may have limitations due to age, illness, or disabilities, often including both professional and non-professional support.

Disenfranchised Grief

Grief that is not acknowledged or recognized by society.