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 $100,000; 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 $150,000 tax basis for her partnership interest.
• D)The partnership has a $150,000 adjusted basis in the land contributed by Anna.
• E)None of the statements is true.

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Definitions:

Developmental Period

A specific phase in an individual's life marked by unique physical, psychological, or emotional growth and change.

Sexual Maturity

The stage in which an individual reaches full reproductive ability and exhibits secondary sexual characteristics.

Adolescence

A developmental stage that occurs between childhood and adulthood, marked by significant physical, psychological, and social changes.

Secondary Sex Characteristics

Physiological signs of sexual maturation (such as breast development and growth of body hair) that do not involve the sex organs.