1. USE THESE FACTS TO ANSWER QUESTIONS 45 and 46. David and Goliath form the DG Partnership. Each received a one-half interest in capital and profits. David contributed land having a fair market value of $10,000. The adjusted basis of the land in the hands of David was $8,000. Goliath contributed legal and tax planning services. Immediately following the formation, the FMV of a one-half interest in the DG partnership was $10,000. How much income gain will Goliath recognize as a result of his contribution?

   		a. $10,000.
   		b. $18,000.
   		c. zero.
   		d. None of the above.

2 points

QUESTION 46

1. How much income or gain will David recognize as a result of his contribution?

   		a. $8,000.
   		b. $2,000.
   		c. $10,000.
   		d. zero.
   		e. None of the above.