Sabrina Contributes a Building with an Adjusted Basis of $80,000

question 72

Multiple Choice

Sabrina contributes a building with an adjusted basis of $80,000 to a partnership.The fair market value of the building is $100,000 on the date of the contribution.What is Sabrina's basis in her partnership interest immediately after the contribution?

• A)$0
• B)$40,000
• C)$80,000
• D)$100,000
• E)None of the above

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Definitions:

Owners' Equity

The residual interest in the assets of a business after deducting liabilities, essentially the ownership interest in the business.

Store Equipment

The fixtures and tools used in a retail store to display and manage products, excluding inventory.

Owners' Claims

Owners' claims refer to the interests or rights of ownership that shareholders or proprietors have in a company, including profits and assets.

Business Assets

Resources owned by a business that have economic value and can contribute to future profits, such as equipment, inventory, and patents.