Allen Contributed Land, Which Was Being Held for Sale to Allen's

question 116

Multiple Choice

Allen contributed land, which was being held for sale to Allen's customers, to a partnership in exchange for a 20% interest. The partnership uses the land in its business for three years and then sells the property. When the property was contributed, it had a basis in Allen's hands of $500,000 and an FMV of $600,000. The partnership sells the land for $700,000. The gain reported by the partnership is

• A)$100,000 of ordinary income and $100,000 of Sec. 1231 gain.
• B)$100,000 of Sec. 1231 gain and $100,000 of capital gain.
• C)$200,000 of ordinary income.
• D)$200,000 of Sec. 1231 gain.

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Definitions:

Personality Stable

The concept that an individual's personality traits remain consistent over time.

Individual's Personality

The unique combination of emotional, attitudinal, and behavioral response patterns of an individual.

Openness to Experience

A personality trait that features a person's willingness to try new things, engage in abstract thinking, and appreciate art, emotion, adventure, and unusual ideas.

Big Five

Refers to the five broad personality traits considered to describe human personality: openness, conscientiousness, extraversion, agreeableness, and neuroticism.