For a 20% Interest in Partnership Capital, Profits, and Losses

question 75

Multiple Choice

For a 20% interest in partnership capital, profits, and losses, Kasi contributes a machine having a basis of $30,000 and an FMV of $40,000. The partnership also assumes a $24,000 recourse liability secured by the machine. The partnership has $6,000 in recourse liabilities immediately preceding Kasi's contributions. Partners share the economic risk of loss from recourse liabilities in the same way they share partnership losses. Kasi's basis in the partnership interest is

• A)$10,800.
• B)$12,000.
• C)$13,200.
• D)$30,000.

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Definitions:

Rate Of Return

Earnings or losses on an investment throughout a certain timeframe, indicated as a percentage of the investment’s inception cost.

Projects

Specific initiatives or plans undertaken by a business or organization to achieve certain goals, often involving research, development, or investment in new products or services.

Diesel Electric Hybrid

A vehicle or machine that uses a combination of a diesel engine and electric motors for propulsion, aiming to increase efficiency and reduce emissions.

Increase Emissions

Refers to a rise in the release of pollutants into the atmosphere from sources such as vehicles, industries, or machines.