On January 1 of the Current Year, Jenna and Rob

question 71

Multiple Choice

On January 1 of the current year, Jenna and Rob form an equal partnership.Jenna makes a cash contribution of $80,000 and a property contribution (adjusted basis of $120,000; fair market value of $160,000) in exchange for her interest in the partnership.Rob contributes property (adjusted basis of $190,000; fair market value of $240,000) in exchange for his partnership interest.Which of the following statements is true concerning the income tax results of this partnership formation?

• A)Jenna has a $200,000 tax basis for her partnership interest.
• B)Rob recognizes a $50,000 gain on his property transfer.
• C)Rob has a $240,000 tax basis for his partnership interest.
• D)The partnership has a $160,000 adjusted basis in the property contributed by Jenna.
• E)None of the statements is true.

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Definitions:

Glomerular Capsule

Part of the nephron in the kidney, a cup-like sac surrounding the glomerulus, which filters blood to form urine.

Blood Plasma

The liquid component of blood that carries cells and proteins throughout the body.

Acid-Base Balance

The homeostatic regulation of the pH levels in bodily fluids, crucial for maintaining the proper functioning of various enzymes and metabolic processes.

Homeostasis

Maintenance of normal internal conditions in a cell or an organism by means of self-regulating mechanisms.