Rebecca and Stan Each Own a 50% Interest in a Business

question 132

Multiple Choice

Rebecca and Stan each own a 50% interest in a business entity.Rebecca contributed $200,000 for her ownership interest and Stan contributed land worth $200,000 (adjusted basis of $150,000) .Several months after the formation of the entity,the land is sold for $220,000.

• A)If the entity is a partnership, Stan's share of the recognized gain on the sale of the land is $35,000.
• B)If the entity is an S corporation, Stan's share of the recognized gain on the sale of the land is $60,000.
• C)If the entity is a C corporation, Stan's share of the recognized gain on the sale of the land is $10,000.
• D)If the entity is a limited liability company, Stan's share of the recognized gain on the sale of the land is $60,000.
• E)None of the above.

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