David Contributes Investment Land with a Basis of $24,000 and an FMV

question 115

Multiple Choice

David contributes investment land with a basis of $24,000 and an FMV of $40,000 to a partnership for a 10% interest in partnership capital, profits, and losses. The land is subject to a $30,000 recourse liability, which is assumed by the partnership. The partnership has other recourse liabilities of $18,000. Partners share the economic risk of loss from recourse liabilities in the same way they share partnership losses. David must recognize a

• A)$3,000 capital gain.
• B)$3,000 capital loss.
• C)$1,200 capital gain.
• D)$1,200 capital loss.

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Definitions:

Family Systems Therapy

A therapeutic approach focusing on understanding and treating individuals within the context of their family units, recognizing and addressing patterns and relationships that impact mental health.

Humanistic Therapy

A type of psychotherapy that emphasizes personal growth and self-fulfillment through self-exploration and self-acceptance.

Anxiety

An emotion characterized by feelings of tension, worried thoughts, and physical changes like increased blood pressure, relating to anticipation of a feared event or situation.

Freudian Methods

Techniques used in psychoanalysis developed by Sigmund Freud, focusing on uncovering unconscious motivations and conflicts driving human behavior.