Binita Contributed Property with a Basis of $40,000 and a Value

question 1

Multiple Choice

Binita contributed property with a basis of $40,000 and a value of $50,000 to the BE Partnership in exchange for a 20% interest in partnership capital and profits.During the first year of partnership operations, BE had net taxable income of $30,000 and tax-exempt interest income of $10,000.The partnership distributed $10,000 cash to Binita.Binita's adjusted basis (outside basis) for her partnership interest at year-end is:

• A)$36,000.
• B)$38,000.
• C)$60,000.
• D)$70,000.
• E)None of the above.

---

Definitions:

Comprehensiveness

Refers to the quality of including all or nearly all elements or aspects of something.

Comparative Reasoning

Evaluating two or more objects, ideas, or situations to identify similarities and differences.

Comparative Inferences

The process of drawing conclusions based on comparisons between different sets of data or situations.

Productivity Criterion

A measure or standard used to evaluate the efficiency and effectiveness of a task or process.