[42] Gleim #: 8.3.65

ABC Partnership was formed on March 1 of the current year by three individuals. A

contributed $20,000 cash for a 25% interest. B contributed property with an adjusted

basis of $28,000 and fair market value of $32,000, subject to a $12,000 mortgage. C

contributed property with an adjusted basis of $20,000 and fair market value of $64,000,

subject to a $24,000 liability. B and C received 25% and 50% partnership interests,

respectively. The partnership assumed both partners' liabilities. The partnership has no

other liabilities. On March 1 of the current year, B's gain recognized on contribution and

basis in partnership interest are

A.

B.

C.

D.

$9,000 gain, $19,000 basis.

$9,000 gain, $25,000 basis.

$0 gain, $25,000 basis.

$0 gain, $19,000 basis.