3. And equal partnership is formed by Rita and Gerry, Rita contribute cash of $1

Question

3. And equal partnership is formed by Rita and Gerry, Rita contribute cash of $10,000 and a building with a fair market value of $150,000, adjusted basis of $55,000, and subject to the liability of $60,000. Gerry contributes cash of $100,000. What amount of gain must Rita recognize as a result of this transaction? A. $5000 B. $95000 C. $0 D. $35000 E. None of these choices are correct 3. And equal partnership is formed by Rita and Gerry, Rita contribute cash of $10,000 and a building with a fair market value of $150,000, adjusted basis of $55,000, and subject to the liability of $60,000. Gerry contributes cash of $100,000. What amount of gain must Rita recognize as a result of this transaction? A. $5000 B. $95000 C. $0 D. $35000 E. None of these choices are correct A. $5000 B. $95000 C. $0 D. $35000 E. None of these choices are correct

Explanation / Answer

Answer :- Option C). $ 0.

Explanation :- Gain recognized by Rita in the given question = (10000 + 150000) - (100000 + 60000)

= 160000 - 160000

= $ 0. (Option C).

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