25. Sam, Sue, and Shelley formed a partnership. Sam received a 50 percent intere

Question

25.        Sam, Sue, and Shelley formed a partnership. Sam received a 50 percent interest in the partnership in exchange for land with an adjusted basis to him of $30,000 and a fair market value of $50,000. Sue received a 25 percent interest in the partnership in exchange for $25,000 of cash. Shelley received a 25 percent interest in the partnership in exchange for $25,000 of cash. Three years after the date of contribution, the land contributed by Sam was sold by the partnership to an unrelated third party for $90,000. How much gain was required to be allocated to Sam as a result of the sale by the partnership?

a.         $20,000.

b.         $30,000.

c.          $40,000.

d.         $60,000.

Explanation / Answer

Statement of allocation of gain on sales of land of sam share

There fore answer b is right

Particulars Amount(in $) Total amount received on sales of land-A 90000.00 Less-Adjusted basis value of land-B 30000.00 Net gain C. (A-B) 60000.00 Sam's share in firm 50.00%

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