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safezone safezone
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7 years ago
Ali, a contractor, builds an office building for a construction partnership in exchange for a capital and profits interest in the partnership worth $500,000. Which of the following statements is correct?
A) Ali recognizes $500,000 of ordinary income and the partnership can deduct $500,000 in the current year.
B) Ali recognizes no income and the partnership can deduct nothing in the current year.
C) Ali recognizes $500,000 ordinary income and the partnership deducts the $500,000 over the building's MACRS recovery period as a depreciation expense.
D) Ali recognizes ordinary income in the current year in an amount equal to the depreciation deduction the partnership claims this year for the $500,000 capitalized amount.
Textbook 
Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts

Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts


Edition: 27th
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That's not philosophy, it's geometry
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strwbrrystrwbrry
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Every man, wherever he goes, is encompassed by a cloud of comforting convictions, which move with him like flies on a summer day.
   --Bertrand Russell, 1950

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safezone Author
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7 years ago
Correct Slight Smile TY
deathwing
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Yesterday
Thank you, thank you, thank you!
ethom947
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2 hours ago
Brilliant ツ
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