6. On January 2 of the current year, Black acquired a 50% interest in the New Partnership by contributing property with an adjusted basis of $10,000 and a fair market value of $19,000. The property is subject to a mortgage of $5,000.. What is Black's basis in his partnership on January 2? $19,000 $5,500 $7,500 $15,000 7. The adjusted basis of Jody's partnership interest was $30,000 immediately before Jody received a current distribution of $40,000 cash and property with an adjusted basis to the partnership of $30,000 and a fair market value of $50,000. What amount of taxable gain must Jody report as a result of this distribution? $40,000 $10,000 $0 $20,000 8. Day's adjusted basis in the LMN Partnership interest is $50,000. During the year, Day receives a nonliquidating distribution of $25,000 cash plus land with an adjusted basis of $18,000 to LMN, and a fair market value of $20,000. How much is Day's basis in the land received? $25,000 $15,000 $18,000 $20,000 9. For some entities, the basis of an ownership interest is increased by the entity profits. Which entity or entities does this apply to? Applies only to a partnership Applies to a corporation Applies to both a partnership and an S Corporation. Applies only to an S Corporation.

10. Sanjay contributes land to a business entity in January 2017 for a 10% ownership interest. Sanjays basis for the land is $80,000, and the fair market value is $100,000. The business entity was formed ten years ago by Polly and Rita, who have equal ownership. Which of the following statements is false? If the entity is a C Corporation, Sanjay will have $20,000 of taxable income If the entity is a partnership, Sanjay will have no recognized income If the entity is a Partnership, Sanjay will have $20,000 of recognized income If the entity is an S Corporation, Sanjay will recognize $20,000 of taxable income