Kevin,Chuck,and Greg Contributed Assets to Form the Equal KCG Partnership

question 135

Multiple Choice

Kevin,Chuck,and Greg contributed assets to form the equal KCG Partnership.Kevin contributed cash of $50,000 and land with a basis of $80,000 (fair market value of $50,000) .Chuck contributed cash of $30,000 and land with a basis of $40,000 (fair market value of $70,000) .Greg contributed cash of $60,000 and a fully depreciated property ($0 basis) valued at $40,000.Which of the following tax treatments is not correct?

• A)Kevin's basis in his partnership interest is $130,000.
• B)Chuck's basis in his partnership interest is $100,000.
• C)Greg's basis in his partnership interest is $60,000.
• D)KCG has a basis of $80,000,$40,000,and $0 in the land and property (excluding cash)contributed by Kevin,Chuck,and Greg,respectively.
• E)All of these statement are correct.

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Definitions:

Profit

This is the financial gain obtained when the amount earned from a business activity exceeds the costs, expenses, and taxes needed to sustain the activity.

Quantity Demanded

The sum of a particular good or service that customers are ready and financially able to buy at a given price.

Productivity

The measure of the efficiency of production, often quantified as the ratio of outputs produced to inputs used in the production process.

Factor Labor

This refers to the human effort, both physical and mental, used in the production of goods and services.