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:

Southern Strategy

A political strategy that involved the Republican Party appealing to the racism against African Americans inherent in the southern United States to gain political support.

Black Americans

Refers to citizens or residents of the United States who have ancestry from black racial groups of Africa.

Moral Panics

Social phenomena where public fear and overreaction are provoked by media coverage, often about issues that are perceived to threaten societal norms and values.

Elite-Engineered

A term referring to scenarios or policies that are designed and implemented by a society's elite or ruling class, often serving their interests.