David Contributes Investment Land with a Basis of $24,000 and an FMV

question 115

Multiple Choice

David contributes investment land with a basis of $24,000 and an FMV of $40,000 to a partnership for a 10% interest in partnership capital, profits, and losses. The land is subject to a $30,000 recourse liability, which is assumed by the partnership. The partnership has other recourse liabilities of $18,000. Partners share the economic risk of loss from recourse liabilities in the same way they share partnership losses. David must recognize a

• A)$3,000 capital gain.
• B)$3,000 capital loss.
• C)$1,200 capital gain.
• D)$1,200 capital loss.

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Definitions:

Conditions

Terms or factors that affect or influence the outcome of a situation, often setting the prerequisites or environment in which an event occurs.

Diotima

A figure associated with Socrates in Plato's "Symposium," often depicted as a wise woman or priestess who instructs Socrates on issues of love and beauty.

Plato's Symposium

A philosophical text by Plato in which characters discuss the nature of love through a series of speeches, exploring differing views on eros, love's role, and its value.

Immortality

The ability to live forever or exist eternally without death or decay.