ACC- John and Yi formed the X partnership on June 16, 20X6

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Description

John and Yi formed the X partnership on June 16, 20X6. They agreed to split profits and losses equally. John contributed $20,000 cash and Yi contributed a machine with a basis of $5,000 (fmv $50,000) subject to a mortgage of $30,000 on June 17, 20X6. Yi’s holding period for the machine began on May 2, 20X4.
Yi’s recognized gain is:
A. 0
B. $10,000
C. $45,000
D. None of the above

Yi’s basis for his partnership interest is:
A. $5,000
B. $20,000
C. $0
D. None of the above

The X partnership’s tax basis for the property contributed by Yi is:
A. $50,000
B. $45,000
C. $20,000
D. $5,000
E. None of the above

When does X partnership’s holding period begin for the property contributed by Yi?
A. June 16, 20X6
B. June 17, 20X6
C. When Yi acquired the property
D. The partnership may elect either (a), (b), or (c)
E. None of the above

John’s recognized gain is:
A. $0
B. $20,000
C. $35,000
D. None of the above

John’s tax basis for his partnership interest is:
A. $20,000
B. $35,000
C. $0
D. None of the above

The X partnership’s net recognized gain or loss is:
A. $15,000
B. $45,000
C. $0
D. None of the above

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