Yong contributes a machine having an adjusted basis of $20,000 and an FMV of $25,000 for a 10% partnership interest. Yong had taken $10,000 of depreciation prior to the contribution. The partnership has no liabilities. As a result of the contribution, Yong must recognize
A. no gain or loss.
B. $10,000 ordinary income.
C. a $5,000 capital gain.
D. a $5,000 Sec. 1245 gain.
Answer: A
You might also like to view...
Phillip is a senior journalist at a news agency. He goes on a temporary leave for six months and travels around different parts of South Asia during his leave. He records his travel experiences in a book and shares it with his colleagues upon his return. During his leave, he was also being paid by the organization. This is an example of a(n)
A. downward move. B. transfer. C. externship. D. sabbatical. E. expatriate assignment.
Most small businesses are more ________ than ________.
A. profit-directed; cost-directed B. innovative; imitative C. imitative; innovative D. cost-directed; profit-directed
The most commonly used method to assign costs to products in process costing is the FIFO costing method
Indicate whether the statement is true or false
Steve, the management accountant of a company, is not familiar with the concept of prudence in financial reporting. Which of the following IMA standards is Steve violating?
A) Confidentiality B) Materiality C) Disclosure D) Competence