Miguel Contributes Land to a Partnership with a Basis of $12,000

question 54

Multiple Choice

Miguel contributes land to a partnership with a basis of $12,000 and a FMV of $18,000.How much gain will Miguel recognize?

• A)$0.
• B)$6,000.
• C)$12,000.
• D)$18,000.

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Definitions:

Compounded Daily

Describes the method by which interest is calculated on an investment or loan with the earned interest being added to the principal daily for future interest calculations.

Annual Percentage Yield

The real rate of return earned on an investment, taking into account the effect of compounding interest.

Compounded Daily

Refers to the method of calculating interest where the accumulated interest is added to the principal sum every day.

Interest

The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.