Mr Jamail Transferred Business Personality (FMV $187,000; Adjusted Tax Basis

Mr. Jamail transferred business personality (FMV $187,000; adjusted tax basis $29,900) to J&K Partnership in exchange for a partnership interest. Which of the following statements is true?

A) If Mr. Jamail owns a 14% partnership interest immediately after the exchange, he must recognize a $157,100 gain.
B) If Mr. Jamail owns a 34% partnership interest immediately after the exchange, he recognizes no gain on the exchange.
C) If Mr. Jamail owns a 14% partnership interest immediately after the exchange, his tax basis in the interest is $187,000.
D) Statements a. and c. are true.

Correct Answer:

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