Patrick Purchases a One-Third Interest in the PPP Partnership for $600,000

question 82

Multiple Choice

Patrick purchases a one-third interest in the PPP partnership for $600,000. The partnership has assets with a value of $1,500,000. PPP has a 754 election in effect. What is the amount of the basis adjustment?

• A)$0
• B)$300,000 increase in the basis of partnership assets
• C)$100,000 increase in Patrick's basis in the partnership assets
• D)$100,000 increase in Patrick's share of the basis in the partnership assets

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Definitions:

Displaced

Removed or moved out of a usual or proper place, often referring to people who are forced to leave their homes.

Fixated

Exhibiting an obsessive focus on an idea, task, or object, often at the expense of the ability to engage with a broader range of topics or activities.

Superego

The part of personality that, according to Freud, represents internalized ideals and provides standards for judgment (the conscience) and for future aspirations.

Ego

The largely conscious, “executive” part of personality that, according to Freud, mediates among the demands of the id, superego, and reality. The ego operates on the reality principle, satisfying the id’s desires in ways that will realistically bring pleasure rather than pain.