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.

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Definitions:

Gene Therapy

A medical treatment involving the introduction of genes into a patient's cells to treat or prevent disease.

Transfer

The movement or relocation of something from one place, person, or system to another.

DNA Cloning Vector

A DNA molecule such as a plasmid or virus, used to artificially carry foreign genetic material into another cell, where it can be replicated and/or expressed.

Bacterial Plasmid

Small, circular, double-stranded DNA molecules found in bacteria that can replicate independently of the chromosomal DNA, often carrying genes beneficial to survival, such as antibiotic resistance genes.