Lexi and Allie Formed a Partnership

question 91

Multiple Choice

Lexi and Allie formed a partnership. Lexi received a 30% interest in partnership capital and profits in exchange for land with a basis of $50,000 and a fair market value of $90,000. Allie received a 70% interest in partnership capital and profits in exchange for $210,000 of cash. Three years after the contribution date, the land contributed by Lexi is sold by the partnership to a third party for $120,000. How much taxable gain will Lexi recognize from the sale?

• A) $21,000.
• B) $40,000.
• C) $49,000.
• D) $70,000.
• E) None of the above.

Recognize how equilibrium wage is determined in perfectly competitive labor markets.

Understand the role of human capital in determining wage disparities.

Analyze how changes in product demand affect a firm’s labor demand.

Recognize leisure as a normal good and its relationship with income.

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