During the Current Year, Norman Contributed Investment Property Held for Over

During the current year, Norman contributed investment property held for over one year to the Mary Ann Partnership for a 40 percent interest in partnership capital and profits. His tax basis in the property contributed was $8,000, and the property had a fair market value of $10,000 on the date of the contribution to the partnership. What gain or loss should Norman report as a result of the contribution of the property to the partnership in exchange for the 40 percent partnership interest?

A) No gain or loss
B) $2,000 long-term capital gain
C) $2,000 ordinary income
D) $10,000 long-term capital gain
E) None of these

Correct Answer:

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