Quiz 21 - Quiz Willis/Hoffman/Maloney/Raabe South-Western...

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Web Quiz Assignment Name: Willis/Hoffman/Maloney/Raabe, South-Western Federal Taxation 2010: Comprehensive 33e, Chapter 21 59:58 1. Frederick and Suzanne formed an equal partnership on June 1 of the current year. Frederick contributed $15,000 cash and land with a basis of $6,000 and a fair market value of $10,000. Suzanne contributed equipment with a basis of $4,000 and a value of $25,000. Frederick's tax basis in his interest is $25,000; Suzanne's tax basis is also $25,000. True False n m l k j n m l k j 2. Harrison and Richard form the equal MC Partnership during the year. Harrison contributes land with a fair market value of $200,000 and a basis of $230,000, and Richard contributes $200,000 cash. As a result of these transactions, Harrison may recognize a loss of $30,000. True False n m l k j n m l k j 3. Molly is a real estate developer and owns property that is treated as inventory (not a capital asset) in her business. She contributed a parcel of this land (basis $30,000; fair market value $24,000) to a partnership, which will also hold it as inventory. After three years, the partnership sells the land for $20,000. The partnership will recognize a $10,000 capital loss on sale of the property. True False n m l k j n m l k j 4. Maggie purchased her partnership interest from Tyra on the first day of the current year for $40,000 cash. She received a $15,000 cash distribution from the partnership during the year, and her share of partnership income is $14,000. If her share of partnership liabilities on the last day of the partnership
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