In February of Year 1, Mary contributed cash of $50,000 and Kay contributed land with an adjusted basis of $70,000 and a fair market value of $50,000 to form a pa nership. In Year 3, the land was sold for $36,000. Kay's share of the loss from the sale of land is

A. $34,000

B. $27,000

C. $17,000

D. $7,000

Which of the following is most likely to qualify as a guaranteed payment under Sec. 707(c)?

A, B, and C decide to form a partnership to build an apartment building. A, an architect, draws up the plans for the building. The partnership pays A his usual fee.

B. A and B contribute cash to their partnership as a capital contribution and agree that the partnership will pay them an 8% annual payment for the use of their capital. The partnership pays the annual amount.

C. A, a partner in the AB Partnership, lends $10,000 to the partnership on a 10% 1-year secured note. Regular payments of interest are made.

D. B, a stockholder and a 30% pa ner, sells stock to the ABC Partnership. The stock is sold for its fair market value.