If a Personal-Use Asset Is Contributed to a Partnership for Business

question 34

Multiple Choice

If a personal-use asset is contributed to a partnership for business use,the partnership's basis in the asset is always:

• A)$0.
• B)The FMV of the asset at the date of contribution.
• C)The basis of the asset at the date of contribution.
• D)The lesser of the asset's FMV or basis at the date of contribution.

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Definitions:

Drafters

Professionals who prepare technical drawings and plans under the guidance of architects and engineers.

Bicameral Legislature

A legislative body consisting of two separate chambers or houses, typically a lower and an upper house, designed to ensure checks and balances within the government.

Republicanism

A political ideology centered on citizenship in a state organized as a republic, emphasizing liberty, and the civic virtue practiced by citizens.

Federalism

A system of government in which power is divided between a central authority and constituent political units (such as states), allowing for shared control and responsibilities.