Kevin,Chuck,and Greg Contributed Assets to Form the Equal KCG Partnership

question 135

Multiple Choice

Kevin,Chuck,and Greg contributed assets to form the equal KCG Partnership.Kevin contributed cash of $50,000 and land with a basis of $80,000 (fair market value of $50,000) .Chuck contributed cash of $30,000 and land with a basis of $40,000 (fair market value of $70,000) .Greg contributed cash of $60,000 and a fully depreciated property ($0 basis) valued at $40,000.Which of the following tax treatments is not correct?

• A)Kevin's basis in his partnership interest is $130,000.
• B)Chuck's basis in his partnership interest is $100,000.
• C)Greg's basis in his partnership interest is $60,000.
• D)KCG has a basis of $80,000,$40,000,and $0 in the land and property (excluding cash)contributed by Kevin,Chuck,and Greg,respectively.
• E)All of these statement are correct.

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Definitions:

Insurance

A financial product or agreement where an individual or entity receives financial protection or reimbursement against losses from an insurance company.

Inherent Risks

Risks that exist naturally within a project or activity, regardless of any mitigating strategies.

Efficient Markets Hypothesis

A theory stating that asset prices fully reflect all available information, making it impossible to consistently achieve higher returns than the average market return.

Random Walk

The path of a variable whose changes are impossible to predict.