Rocky and Charlie Form RC Partnership as Equal Partners

question 88

Multiple Choice

Rocky and Charlie form RC Partnership as equal partners.Rocky contributes $100,000 into RC while Charlie contributes real estate with a fair market value of $100,000.During the current year,RC earned net income of $600,000.The partnership distributes $200,000 to each partner.The amount that Rocky should report on his individual tax return is

• A)$0.
• B)$100,000.
• C)$200,000.
• D)$300,000.

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Definitions:

Market-to-Book Ratio

A ratio used to compare a company's current market price to its book value.

Depreciation Life

The estimated period over which a fixed asset is expected to be usable, affecting its depreciation calculation for accounting purposes.

Use of Cash

Refers to the ways in which a company or individual utilizes available cash resources.