Loretta Contributes Property to a Partnership in Exchange for a 25

question 2

Multiple Choice

Loretta contributes property to a partnership in exchange for a 25 percent partnership interest.The property contributed has a fair market value of $45,000 and a basis of $35,000 on the date of the contribution to the partnership.In addition, Loretta receives a 10 percent partnership interest, valued at $18,000, in exchange for services rendered to the partnership.What is Loretta's basis in her partnership interest, immediately after these transactions?

• A)$35,000
• B)$45,000
• C)$53,000
• D)$63,000
• E)None of the above

---

Definitions:

Terms of Agreement

The conditions and stipulations determined by parties involved in a contract or agreement.

Outside Options

Alternatives available to negotiating parties if current negotiations fail, affecting their bargaining power.

Non-Strategic View

A perspective that does not involve long-term planning or consideration of competitive positioning.

Terms of Agreement

A set of conditions and stipulations agreed upon by parties entering a contract or negotiation.