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Today, 06:45

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

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  1. Today, 06:51
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    Correct option is C.

    $50,000

    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)
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