Lance transferred land having a $180,000 FMV and a $105,000 adjusted basis,which is subject to a $150,000 mortgage in exchange for a one-third interest in the Trois Partnership.Lance acquired the land in 2010.The partnership owes no other liabilities.Lance,Rhonda,and Zach share profits and losses equally and each has a one-third interest in partnership capital.The tax effect to Lance is

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According to the facts given in the question, Lance transferred land with an FMV of $180,000 and an adjusted basis of $105,000, subject to a mortgage of $150,000. In exchange, he received a one-third interest in the Trois Partnership. Since the partnership has no other liabilities, the mortgage assumed by the partnership can be ignored for tax purposes.

To compute the gain or loss on the transfer, we need to compare the amount realized (i.e., Lance's share in the partnership) with his adjusted basis in the land. Lance's share of the partnership can be valued at $180,000 (the FMV of the land), which is also equal to the total partnership capital. Therefore, Lance's share of the partnership capital is $60,000 (one-third of $180,000).

Since Lance's adjusted basis in the land is $105,000, and the amount realized (i.e., his share of the partnership) is only $60,000, he has a loss of $45,000 on the transfer. However, this loss is not recognized for tax purposes since Lance transferred the land in exchange for a partnership interest. The tax code provides that no gain or loss is recognized on the transfer of property to a partnership in exchange for a partnership interest (subject to certain exceptions not relevant here). Therefore, the correct answer is (A) no gain or loss recognized.

Lance Transferred Land Having a $180,000 FMV and a $105,000