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

question 38

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: $\begin{array} { l r r } \text { Assets: } & \text { Basis } & \text { FMV } \\\text { Cash } & \$ 48,000 & \$ 48,000 \\\text { Land held for irvestrnent } & 96,000 & 132,000\end{array}$ $\begin{array}{l}\text { Liabilities ard Capital: }\\\begin{array} { l l l } \text { Capital } & \text { Paul } & 48,000 \\& \text { Kristi } & 48,000 \\& \text { David } & 48,000\end{array}\end{array}$ 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.

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Definitions:

Fair Share

The principle that all members of a group should equally contribute to, or benefit from, resources or opportunities.

Social Unionism

A form of unionism that focuses on broader societal issues beyond the workplace, such as social justice, political advocacy, and community involvement.

Political Outcomes

The consequences or results of political actions and decisions, which can include changes in policy, legislation, or the balance of power within government institutions.

Job Control Unionism

A form of unionism focusing on regulating aspects of employment, such as wages, work hours, and working conditions, through collective bargaining.