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Sheena Maskell Sheena Maskell
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7 years ago
Patrick acquired a 50% interest in a partnership by contributing property that had an adjusted basis of $8,000 and a fair market value of $29,000. The property was subject to a liability of $22,000, which the partnership assumed for legitimate business purposes. Which of the following statements is correct?
A) Patrick will be required to report a $3,000 gain due to the negative basis rules and will have a basis in his partnership interest of zero.
B) Patrick will not be required to report a gain on his return and will have a basis in his partnership interest of negative $3,000.
C) Patrick will be required to report a $21,000 gain due to the negative basis rules and will have a basis in his partnership interest of zero.
D) Patrick will not be required to report a gain on his return but the gain will increase the basis of his partnership interest.
Textbook 
Prentice Hall's Federal Taxation: 2011: Individuals

Prentice Hall's Federal Taxation: 2011: Individuals


Edition: 14th
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Yoko900Yoko900
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Sheena M. Author
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7 years ago
Thank you so much
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