On January 1 of the Current Year, Anna and Jason

question 49

Multiple Choice

On January 1 of the current year, Anna and Jason form an equal partnership. Anna contributes $50,000 cash and a parcel of land (adjusted basis of $200,000; fair market value of $150,000) in exchange for her interest in the partnership. Jason contributes property (adjusted basis of $180,000; fair market value of $200,000) in exchange for his partnership interest. Which of the following statements is true concerning the income tax results of this partnership formation?

• A) Jason recognizes a $20,000 gain on his property transfer.
• B) Jason has a $200,000 tax basis for his partnership interest.
• C) Anna has a $250,000 tax basis for her partnership interest.
• D) Anna realizes and recognizes a $50,000 loss.
• E) The partnership has a $150,000 adjusted basis in the land contributed by Anna.

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Definitions:

Extinction

In psychology, extinction refers to the gradual weakening and eventual disappearance of a conditioned response when the conditioned stimulus is no longer paired with the unconditioned stimulus.

Vicarious Learning

A process of learning through observing the actions and consequences of others, without direct personal experience.

Observing Others

involves learning behaviors, attitudes, or emotions through watching the actions of others, also known as observational learning or social learning.

Classical Conditioning

The method of teaching through the repeated coupling of two stimuli; the response, initially caused by the second stimulus, is later caused by only the first stimulus.