Tim, Al, and Pat Contributed Assets to Form the Equal

question 7

Multiple Choice

Tim, Al, and Pat contributed assets to form the equal TAP Partnership. Tim contributed cash of $40,000 and land with a basis of $80,000 (fair market value of $60,000) . Al contributed cash of $60,000 and land with a basis of $50,000 (fair market value of $40,000) . Pat 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) Tim's basis in his partnership interest is $120,000.
• B) Al realizes and recognizes a loss of $10,000.
• C) Pat realizes a gain of $40,000 but recognizes $0 gain.
• D) TAP has a basis of $80,000, $50,000, and $0 in the land and property (excluding cash) contributed by Tim, Al, and Pat, respectively.
• E) All of these statements are correct.

---

Definitions:

Flickers

Brief, intermittent flashes of light or the rapid movement of an object, often creating a visual effect.

Jealousy

An emotion experienced due to the threat of losing something or someone of value to a rival.

Threatens

Expressing an intention to inflict pain, injury, damage, or other hostile action on someone in retribution for something done or not done.

Heterosexual Men

Men who are sexually attracted exclusively to women.