29.Sue and Andrew form SA general partnership. Each person receives an equal interest in the newly created partnership. Sue contributes $10,000 of cash and land with a FMV of $55,000. Her basis in the land is $20,000. Andrew contributes equipment with a FMV of $12,000 and a building with a FMV of $33,000. His basis in the equipment is $8,000, and his basis in the building is $20,000. How much gain must the SA general partnership recognize on the transfer of these assets from Sue and Andrew? A. $0B. $4,000C. $48,000D. $52,000
30.Erica and Brett decide to form their new motorcycle business as a LLC. Each will receive an equal profits (loss) interest by contributing cash, property, or both. In addition to the members' contributions, their LLC will obtain a $50,000 nonrecourse loan from First Bank at the time it is formed. Brett contributes cash of $5,000 and a building he bought as a storefront for the motorcycles. The building has a FMV of $45,000, an adjusted basis of $30,000, and is secured by a $35,000 nonrecourse mortgage that the LLC will assume. What is Brett's outside tax basis in his LLC interest? A. $37,500B. $40,000C. $42,500D. $45,000
31.Under general circumstances, debt is allocated from the partnership to each partner in the following manner: A. Recourse - profit sharing ratios; nonrecourse - profit sharing ratiosB. Recourse - capital ratios; nonrecourse - capital ratiosC. Recourse - to partners with the ultimate responsibility for paying the debt; nonrecourse - profit sharing ratiosD. Recourse - profit sharing ratios; nonrecourse - to partners with the ultimate responsibility for paying the debt
32.Which of the following statements is true when property is contributed in exchange for a partnership interest? A. Any contributed property in a partnership has a carryover basis, and the character of the property is determined by the way the contributing partner used the property.B. The partnership's inside basis is typically increased by any gain the partner recognizes from the property contribution.C. The holding period for a partner's partnership interest depends upon the type of assets a partner contributes.D. Services are not allowed to be contributed to a partnership in return for a partnership interest.E. All of the above are true.
33.In X1, Adam and Jason formed ABC, LLC, a car dealership in Kansas City. In X2, Adam and Jason realized they needed an advertising expert to assist in their business. Thus, the two members offered Cory, a marketing expert, a 1/3 capital interest in their partnership for contributing his expert services. Cory agreed to this arrangement and received his capital interest in X2. If the value of the LLC's capital equals $180,000 when Cory receives his 1/3 capital interest, which of the following tax consequences does not occur in X2? A. Cory reports $60,000 of ordinary income in X2B. Adam, Jason and Cory receive an ordinary deduction of $20,000 in X2C. Adam and Jason receive an ordinary deduction of $30,000 in X2D. A and C