Question

blake and ryan form the poole partnership. blake contributes cash of $15,000. ryan contributes land with an adjusted basis of $1,000 and a fair market value of $21,000. the land is subject to a $6,000 mortgage that poole assumes. blake and ryan both receive a 50 percent interest in poole. what is ryan's recognized gain or loss on the contribution? a.$3,000 b.$2,000 c.$20,000 d.$5,000 e.none of these choices are correct.

Answer 1

Ryan's recognized gain on the contribution is $20,000.

Step-by-step explanation:

Ryan's recognized gain or loss on the contribution can be calculated by comparing the fair market value of the land ($21,000) with its adjusted basis ($1,000). The recognized gain or loss is the difference between these two values. In this case, Ryan's recognized gain would be $20,000 ($21,000 - $1,000). Therefore, the correct answer is (c) $20,000.