Question

1) ABC Partnership distributes $12,000 to partner Al. Al's distributive share of partnership income is $30,000. Al is taxed on $12,000. (true or false)

2) Yong contributes a machine having an adjusted basis of $20,000 and a FMV of $25,000 for a 10% partnership interest. Yong had taken $10,000 of depreciation prior to the contribution. The partnership has no liabilities. As a result of the contribution, Yong must recognize

A) no gain or loss.

B) $5,000 Sec. 1245 gain.

C) $5,000 capital gain.

D) some other amount

3) Stella acquired a 25% interest in the STUV Partnership by contributing land having an adjusted basis of $48,000 and a fair market value of $100,000. The land was subject to a $48,000 mortgage, which was assumed by STUV. No other liabilities existed at the time of contribution. What is Stella's basis in her partnership interest?

A) $0

B) $32,000

C) $52,000

D) $64,000

Answer 1

1 ) Answer: False

AI should be taxed for $30000

2 ) Answer: option (a)

No gain or loss

3 ) Answer: option (a)

$0