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:

P Value

A statistical measure that helps determine the significance of results, indicating the probability of observing the results if the null hypothesis is true.

Null Hypothesis

An initial hypothesis that assumes no association or difference between groups or variables, tested against an alternative hypothesis.

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Effect Size

A quantitative measure of the magnitude of a phenomenon or the strength of the relationship between variables.