Sabrina Contributes a Building with an Adjusted Basis of $80,000

question 72

Multiple Choice

Sabrina contributes a building with an adjusted basis of $80,000 to a partnership.The fair market value of the building is $100,000 on the date of the contribution.What is Sabrina's basis in her partnership interest immediately after the contribution?

• A)$0
• B)$40,000
• C)$80,000
• D)$100,000
• E)None of the above

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Definitions:

Net Income

The total profit or loss of a company after all revenues and expenses have been accounted for.

Shareholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the ownership interest of shareholders.

Statement of Changes

A financial report detailing the changes in equity of a company over a specific period.

ASPE

Accounting Standards for Private Enterprises, a set of accounting standards for privately-held companies in Canada, providing guidelines on financial reporting.