Chase, Marty and Barry Form a Partnership

question 91

Multiple Choice

Chase, Marty and Barry form a partnership. Barry will contribute a building worth $240,000 (adjusted basis of $110,000) , inventory worth $55,000 (adjusted basis of $30,000) and $15,000 in cash for a 25% interest in the partnership. How much gain will Barry have to recognize from the exchange of his property for the partnership interest?

• A)$-0-
• B)$125,000 ordinary gain.
• C)$130,000 long-term capital gain.
• D)$5,000 ordinary gain.
• E)$130,000 long-term capital gain and $5,000 ordinary loss.

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Definitions:

Agency Leaders

Senior individuals in charge of directing and managing an organization or agency.

Client Needs

The requirements or services that a client or customer requires from a professional or an organization to solve a problem or meet a goal.

Separate From Environment

The concept of distinguishing individuals or groups from their surrounding environmental conditions, often used in ecological or social science studies.

Knowledge And Consent

Informed agreement or permission given by a person with full understanding of the facts and implications of an action or decision.