Question
An architect performed services for Bill and Sue and, in lieu of her normal fee, accepted a 10 percent interest in a partnership with a
An architect performed services for Bill and Sue and, in lieu of her normal fee, accepted a 10 percent interest in a partnership with a fair market value of $10,000. How much income from this arrangement should the architect report on her income tax return?
A. The architect does not have any currently taxable income. | ||
B. The architect has realized $10,000 in capital gains. | ||
C. The architect must recognize $10,000 in compensation income. | ||
D. The architect has realized $10,000 in compensation income, but does not have to recognize it until she sells her interest in the partnership.
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