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.

---

Definitions:

Electric Current

The flow of electric charge through a conductor, typically measured in amperes (A).

Lobotomies

Surgical procedures that involve severing connections in the brain's prefrontal cortex, historically used to treat mental illness.

Severely Disturbed

Refers to individuals with extreme emotional, behavioral, or mental health issues that significantly impair functioning.

Hopelessly Depressed

A state of severe depression where the individual feels an overwhelming sense of despair without hope for improvement.