56. Brooke and John formed a partnership. Brooke received a 40% interest in partnership capital and profits in exchange for contributing land (basis of $30,000 and fair market value of $120,000). John received a 60% interest in partnership capital and profits in exchange for contributing $180,000 of cash. Three years after the contribution date, the land contributed by Brooke is sold by the partnership to a third party for $150,000. How much taxable gain will Brooke recognize from the sale? A.$102,000.B. $90,000.C. $48,000.D. $36,000.E. $0.
57. Michelle and Jacob formed the MJ Partnership. Michelle contributed $20,000 of cash in exchange for her 50% interest in the partnership capital and profits. During the first year of partnership operations, the following events occurred: the partnership had a net taxable income of $10,000; Michelle received a distribution of $8,000 cash from the partnership; and Michelle had a 50% share in the partnership’s $16,000 of recourse liabilities on the last day of the partnership year. Michelle’s adjusted basis for her partnership interest at year end is: 58. Which of the following statements is correct regarding the manner in which partnership liabilities are reflected in the partners’ bases in their partnership interests? 59. Alicia and Barry form the AB Partnership at the start of the current year with a land contribution by Barry and a cash contribution by Alicia. Barry’s contributed property is subject to a recourse mortgage assumed by thepartnership. Barry has an 80% interest in AB’s profits and losses. The land has been held by Barry for the past 6years as an investment. It will be used by AB as an operating asset in its parking lot business. Which of the following statements is correct?
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- Spring '08
- Corporation, Types of business entity, partner, Limited liability partnership