Question
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.
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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.
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
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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.
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
