Rashad Contributes a Machine Having a Basis of $30,000 and an FMV

question 46

Multiple Choice

Rashad contributes a machine having a basis of $30,000 and an FMV of $25,000 to a partnership in exchange for a 20% interest in partnership capital, profits, and losses. Prior to the contribution, the partnership had recourse liabilities of $20,000. The partnership assumes a $20,000 recourse liability that is owed by Rashad on the machine. Partners share the economic risk of loss from recourse liabilities in the same way they share partnership losses. Rashad's basis in his partnership interest is

• A)$11,000.
• B)$18,000.
• C)$22,000.
• D)$34,000.

---

Definitions:

Demand Schedule

A table outlining the different quantities of goods or services that consumers are interested in and can feasibly buy at numerous price levels.

Total Revenue

The total income generated by the sale of goods or services before any costs are deducted.

Sales Quantity

The total number of units of a product sold in a specific time period.

Total Revenue

The total amount of money generated by a business from the sale of goods or services before any expenses are subtracted.