Yong Contributes a Machine Having an Adjusted Basis of $20,000

question 53

Multiple Choice

Yong contributes a machine having an adjusted basis of $20,000 and an FMV of $25,000 for a 10% partnership interest. Yong had taken $10,000 of depreciation prior to the contribution. The partnership has no liabilities. As a result of the contribution, Yong must recognize

• A)no gain or loss.
• B)a $5,000 Sec. 1245 gain.
• C)a $5,000 capital gain.
• D)$10,000 ordinary income.

---

Definitions:

Refractory Period

A period immediately following the stimulation during which a nerve or muscle is unresponsive to further stimulation.

Refractory Period

The period immediately following a nerve impulse or muscular contraction in which a nerve or muscle is unresponsive to further stimulation.

Sex Hormones

Biological compounds that play crucial roles in sexual development, reproduction, and secondary sexual characteristics in various organisms.

Castration

The removal of the testicles in males or ovaries in females; often leads to sterility and can have significant hormonal effects.