Stella Acquired a 25% Interest in the STUV Partnership by Contributing

question 73

Multiple Choice

Stella acquired a 25% interest in the STUV Partnership by contributing land having an adjusted basis of $32,000 and a fair market value of $100,000. The land was subject to a $48,000 mortgage, which was assumed by STUV. No other liabilities existed at the time of contribution. What is Stella's basis in her partnership interest?

• A)$0
• B)$32,000
• C)$52,000
• D)$64,000

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Definitions:

Demand Deposits

Bank accounts from which deposited funds can be withdrawn at any time without any notice to the bank, such as checking accounts.

Federal Reserve Board

The governing body of the Federal Reserve System, responsible for overseeing the United States' central bank policies, including regulating banks and setting interest rates.

Federal Open Market Committee

The branch of the Federal Reserve System responsible for setting monetary policy, including influencing interest rates and controlling the money supply.

U.S. Government Securities

Financial instruments issued by the United States Department of the Treasury to finance government spending and obligations, considered low-risk investments.