David and Joycelyn Form an Equal Partnership in the Current

question 117

Multiple Choice

David and Joycelyn form an equal partnership in the current year.No special allocation is provided for in the partnership agreement.During the year David contributes land having a $90,000 basis and a $100,000 FMV in exchange for the initial partnership interest.In addition,the partnership earns $50,000 of ordinary income while partnership liabilities increase from zero to $30,000 by the end of the tax year.The partnership earns $20,000 of tax-exempt interest during the year.David's basis at the end of the current year is

• A)$115,000.
• B)$125,000.
• C)$130,000.
• D)$140,000.

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Definitions:

Government Censorship

The practice by which a government examines and restricts information or content it deems harmful, sensitive, or objectionable from public access or circulation.

Stone's Footnote 4

A famous footnote in United States constitutional law, highlighting circumstances under which courts may have an enhanced duty to scrutinize legislation.

Carolene Products Co.

A landmark U.S. Supreme Court case notable for its Footnote Four, which suggested that certain cases, particularly those involving civil rights and liberties, should be given more exacting judicial scrutiny.

Brandenburg v. Ohio

A 1969 Supreme Court decision that established the government cannot punish inflammatory speech unless that speech is likely to incite imminent lawless action.