1. Jim, not a dealer in real estate, sold real estate with a basis of $27,000 for $5,000 cash, a note for $65,000 and the buyer assumed Jims mortgage on the property of $20,000. During the year the purchaser paid Jim $1,000 principal and $4,000 interest on the note and paid $1,000 principal and $500 interest on the mortgage he assumed. The contract price on the above transaction is what amount?

   	a.	a. $45,000
   	b.	b. $65,000
   	c.	c. $70,000
   	d.	d. $90,000
   	e.	e. None of the above

1. Related-party installment sales include all of the following except the first sellers:

   	a.	a. Brothers and sisters
   	b.	b. Controlled corporations
   	c.	c. Lineal descendants
   	d.	d. Partnerships in which the seller has an interest
   	e.	e. All of the above would be considered related parties

1. Which of the following is (are) a taxable disposition of an installment obligation?

   (1) Gift

   (2) Transfer to a partnership by a partner

   (3) Transfer to heirs (other than the debtor) at death

   	a.	a. (1)
   	b.	b. (1) and (2)
   	c.	c. (2) and (3)
   	d.	d. (1), (2) and (3)
   	e.	e. None of the above

On January 1 of the current year, Reuben and Ted form an equal partnership with a cash contribution of $50,000 from Reuben and a property contribution (adjusted basis of $75,000 and fair market value of $50,000) from Ted. Ted acquired the property two years ago. Which of the following statements is incorrect concerning the income tax results of this partnership formation?

	a.	a. The partnership takes a basis of $75,000 in the property contributed by Ted.
	b.	b. Reuben has a $50,000 basis in his partnership interest. .
	c.	c. No gain or loss results to Reuben, to Ted, or to the partnership.
	d.	d. Ted has a $50,000 basis in his partnership interest.
	e.	e. None of the above is false

1. Bernard owns a 20% profit and loss interest in the BC partnership. Bernard acquired his interest by contributing a noncash, non-depreciable capital asset with a fair market value of $20,000 and an adjusted basis of $5,000. Cora acquired her 80% interest by contributing cash of $80,000. Soon after forming the partnership, the asset contributed by Bernard is sold for $30,000. Assuming no other transactions during the year, Cora includes the following gross income from the partnership:

   	a.	a. $25,000
   	b.	b. $20,000
   	c.	c. $12,500
   	d.	d. $8,000
   	e.	e. None of the above