Sue and Andrew Form SA General Partnership

question 50

Multiple Choice

Sue and Andrew form SA general partnership. Each person receives an equal interest in the newly created partnership. Sue contributes $10,000 of cash and land with a FMV of $55,000. Her basis in the land is $20,000. Andrew contributes equipment with a FMV of $12,000 and a building with a FMV of $33,000. His basis in the equipment is $8,000, and his basis in the building is $20,000. How much gain must the SA general partnership recognize on the transfer of these assets from Sue and Andrew?

• A) $0.
• B) $4,000.
• C) $48,000.
• D) $52,000.

---

Definitions:

Business Plan

A detailed document that outlines the objectives, strategies, marketing, and financial forecasts of a business.

Financing

involves providing funds for business activities, making purchases, or investing.

Small Business Development Centres

Organizations that provide support and resources to small businesses to help them grow and succeed.

U.S. Small Business Administration

A government agency that provides support to entrepreneurs and small businesses through loans, grants, and resource guidance.