Jangyoun Sells Investment Land Having a $30,000 Basis to a Partnership

question 6

Multiple Choice

Jangyoun sells investment land having a $30,000 basis to a partnership in which he has a 60% partnership interest. The partnership pays $26,000 (FMV) for the land. Later, the partnership sells the investment land to a nonpartner for $31,000. On the sale of the land, the partnership must recognize a

• A)$0 gain or loss.
• B)$1,000 capital gain.
• C)$4,000 capital gain and $1,000 Sec. 1231 gain.
• D)$5,000 capital gain.

---

Definitions:

Marginal Rate of Substitution

The rate at which a consumer is able to sacrifice a certain amount of one product for another while keeping their level of satisfaction unchanged.

Good X

A term used to represent an unspecified product or commodity in economic models and analyses.

Good Y

Refers to a hypothetical product or commodity used in economic models and theories to analyze market behaviors and consumer preferences.

Units

Refers to a single, distinct item or entity that is part of a larger quantity, often used in the context of measurement or count.