16. Ann, Joe, and James (a limited partner) formed the AJJ Partnership. Ann, Joe, and James each contributed $50,000 cash. The partnership purchases a building and land for $201,000 using cash and a recourse debt for $126,000. Select the economic risk of loss for (1) Ann, (2) Joe, and (3) James.

a) $50,000; $50,000; $50,000

b) $75,500; $75,500; $50,000

c) $67,000; $67,000; $67,000

d) $25,500; $25,500; $ 0

17. Joan received a 10% capital interest, effective the first day of the year, in Byg Partnership as a wedding gift from Sam, her grandfather. She will be entitled to 10% of the partnership income. Sam owned a capital interest of 40% of the partnership and was entitled to 40% of the partnership income before his gift to Joan. Sam received $40,000 compensation for services to the partnership this year. Total partnership distributable income is $250,000. Select (1) Joans distributive share of partnership income and (2) Sams share of distributive income.

a) $25,000; $75,000

b) $21,000; $75,000

c) $21,000; $63,000

d) $21,000; $79,000

18. Junes adjusted basis of her partnership interest is $20,000. She received a distribution of $12,000 cash and land that had an adjusted basis of $9,000 and a FMV of $15,000. Select the amount of gain or loss that will be recognized by June in the year of the distribution.

a) $6,000

b) None

c) $7,000

d) $1,000