Question

Bob contributed a building with an adjusted basis to Bob of $50,000 and a fair market value of $150,000 subject to a mortgage of $120,000 in exchange for a 30 percent interest in the Alpha Partnership. Alpha will assume the mortgage on the building.

What is Alpha's basis in the building?

a. $0b. $30,000c. $50,000d. $84,000

Answer 1

Correct option is C.

$50,000

Step-by-step explanation:

Alpha's basis in the building is equal to the adjusted basis of the building.

30% of $150,000= $50,000

and the Adjusted basis= $50,000(given)