Sam, Sue, and Shelley formed a partnership

19.Sam, Sue, and Shelley formed a partnership. Sam received a 50 percent interest in thepartnership in exchange for land with an adjusted basis to him of $30,000 and a fair market value of$50,000. Sue received a 25 percent interest in the partnership in exchange for $25,000 of cash.Shelley received a 25 percent interest in the partnership in exchange for $25,000 of cash. Six yearsafter the date of contribution, the land contributed by Sam was sold by the partnership to anunrelated third party for $90,000. How much gain was required to be allocated to Sam as a result ofthe sale by the partnership? a. $20,000 b. $30,000 c. $40,000 d. $60,000 20. Larry and Moe are equal partners in the capital and profits of The LM Partnership. They are notrelated. On August 1, 2014, Larry sold 100 shares of Last Chance Mining Corp. stock to the partnershipfor its fair market value of $7,000. Larry had purchased the stock in 2000 for $10,000. What, if any, isLarry’s recognized loss on the sale of this stock? a. $ -0- b. $3,000 long-term capital loss c. $1,500 long-term capital loss d. $3,000 ordinary loss 21.Larry and Moe of the partnership in the prior question admit Curly to the partnership which isrenamed The LMC Partnership. The total value of the partnership was $120,000 on December 31,2014. On January 1, 2015, Curly contributed $40,000 to the partnership, and Curly’s partnershipcapital account was credited with $40,000. The partnership’s ordinary net income for 2015 was$60,000. As of December 31, 2015, Curly’s basis in his partnership interest and his 2015 incometaxable income from the partnership were: a. basis and income are both $60,000 b. basis=$60,000, income=$20,000 c. basis=$60,000,income=$40,000 d. basis=$40,000,income =$20,000 22.On July 1, 2015, Lester acquired a 30% interest in Cupcake Bakery, a partnership, bycontributing to the partnership property with a an adjusted basis to him of $5,000 and a fair marketvalue of $12,000 subject to a mortgage of $8,000 which was assumed by the partnership. What isLester’s basis in his interest in Cupcake Bakery? a. $4,000 b. $5,000 c. $6,400 d. $-0- 23.On January 1, 2015, Carl, Hank, and Laurie formed a three-person equal partnership with Carland Hank each contributing $100,000 and Laurie contributing investment property (land) with a basisto her of $60,000 and a fair market value of $100,000. On September 30, 2015, the partnership soldthe land for $130,000. The amount of the gain or loss to be allocated to Laurie is: a. $100,000 gainb. $50,000 gainc. $30,000 gaind. $23,333 gaine. $10,000 loss 24.On January 1, 2015, Carl, Hank, and Laurie formed a three-person equal partnership with Carland Hank each contributing $100,000 and Laurie contributing investment property (land) with a basisto her of $60,000 and a fair market value of $100,000. On September 30, 2015, the partnership soldthe land for $45,000. The amount of the gain or loss to be allocated to Laurie is: a. $5,000 loss b. $10,000 lossc. $15,000 lossd. none of the above 25.When property formerly used by a partner for personal purposes is contributed by the partnerto the partnership which converts it to business or investment use, the partnership takes as its basis inthe property for computing depreciation a. the property’s fair market value at date of contribution. b.the lower of the partner’s adjusted basis in the property or the property’s fair market value atdate of contribution.c. the partner’s adjusted basis in the property. d. none of the above. 26.On January 1, 2015, Carl, Hank, and Laurie formed a three-person equal partnership with Carland Hank each contributing $100,000 and Laurie contributing investment property (land) with a basisto her of $60,000 and a fair market value of $100,000. On September 30, 2015, the partnership soldthe land for $60,000. The amount of the gain or loss to be allocated to Laurie is: a. 0.b. $40,000 loss.c. $60,000 loss.d. none of the above. 27. Which, if any, of the following statements is or are false? I.If property with a built-in loss is contributed to an “investment partnership” thatwould be treated as an investment company if the partnership instead was a corporation, the loss willbe recognized upon contribution. II.A partnership is entitled to deduct a guaranteed payment to a partner if a cashpayment of the same amount to an independent party would have been deductible. a. I only. b. II only c. II and IV. d. III only. 28. On January 1, 2015, Carl, Hank, and Laurie formed a three-person equal partnership with Carl andHank each contributing $100,000 and Laurie contributing investment property (land) with a basis toher of $60,000 and a fair market value of $90,000. On September 30, 2015, the partnership sold theland for $30,000. The amount of the gain or loss to be allocated to Laurie is: a. 0.b. $40,000 loss.c. $30,000 loss.d. $10,000 loss.38.On December 20, 2014, Jim Cash, one of two partners, contributed inventory with a basis tohim of $15,000 and a fair market value of $10,000 to the partnership of which he was a member. Hiscapital account was credited with $10,000. The property, which was a capital asset in the hands of thepartnership, was sold on December 1, 2015 for $12,000. As a result of this sale, what is amount andthe character of any gain or loss allocable to Jim? a. $1,000 gainb. $1,500 lossc. $2,000 gaind. $3,000 losse. None of the above 39.On December 22, 2015, Jim Cash, one of two partners, contributed inventory with a basis tohim of $15,000 and a fair market value of $30,000 to the partnership of which he was a member. His capital account was credited with $30,000. The property, which was a capital asset in the hands of thepartnership, was sold on January 2, 2016 for $18,000. As a result of this sale, what is the amount andcharacter of any gain or loss allocable to Jim? a. $15,000 capital gainb. $1,500 capital gainc. $3,000 ordinary incomed. None of the above 40On December 22, 2008, Jim Cash, one of two partners, contributed capital assets he held forinvestment with a basis to him of $15,000 and a fair market value of $10,000 to the partnership ofwhich he was a member. His capital account was credited with $10,000. The property, which wasinventory in the hands of the partnership, was sold on January 2, 2016 for $18,000. As a result of thissale, what is the character and amount of any gain or loss to be allocated to Jim? a. $1,000 gainb. $4,500 ordinary incomec. $2,000 gaind. $3,000 losse. None of the above