Zoey contributed property with a tax basis of $25,000 and a fair market value of $60,000 to a newly formed partnership in exchange for a 40 percent interest.How much income must Zoey recognize as a result of the transaction?
A)$60,000
B)$35,000
C)$25,000
D)0

Question

Quizplus · Accepted Answer

Under the Internal Revenue Code, no gain or loss is recognized when property is contributed to a partnership in exchange for an interest in the partnership. Therefore, Zoey does not recognize any income from this transaction.

Zoey Contributed Property with a Tax Basis of $25,000 and a Fair