16. Ronald and Roy formed an equal partnership, R&R Partnership, a general partnership, on January 1, 2011. Ronald contributed $100,000 in exchange for his one-half interest in R&R partnership. Roy contributed land worth $100,000 and with an adjusted basis to Roy of $30,000 in exchange for his one-half interest in the partnership. Roy is a real estate developer, and at the time of the contribution, the land was inventory in his hands. The land is a capital asset in the hands of R&R Partnership. If R&R Partnership sells the land in 2017 to an unrelated taxpayer for $180,000,how much gain will be recognized by R&R Partnership and what will be the character of the gain?

a. $80,000, all of which gain will be ordinary income

b. $150,000, all of which gain will be capital gain

c. $150,000, all of which gain will be ordinary income

d. $150,000, consisting of $80,000 capital gain

17. All of the following are separately stated items on a partners Schedule K-1 except

a. short term capital gain.

b. ordinary business income of the partnership.

c. dividends.

d. interest.

18. At the beginning of 2015, Margarets adjusted basis in her 50 percent interest in MP Partnership, a calendar year general partnership, was $10,000. During 2015, Margaret did not make any additional contributions to MP Partnership, and Margarets share of MP Partnership liabilities did not change. During 2015, MP Partnership distributed $5,000 to Margaret, and MP Partnership had the following items of partnership income, deduction, gain and loss for 2015:

Separately stated taxable income $30,000

Tax-exempt interest $10,000

Capital loss ($20,000)

What is Margarets adjusted basis in her partnership interest in MP Partnership at the end of 2015?

a. 0

b. $10,000

c. $15,000

d. $25,000