How much gain does XYZ recognize in Year three

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Question - Carol owns 50% of the capital interest in ABC Partnership and 50% of the profits interest in XYZ Partnership. In Year 1, ABC sold land for $100,000 to XYZ, which XYZ uses in its trade or business. ABC's adjusted basis in the land at the time of the sale was $120,000. In Year 3, XYZ sold the land to an unrelated third party for $160,000. How much gain does XYZ recognize in Year 3?

A. $20,000

B. $60,000

C. $40,000

D. $30,000

Reference no: EM133043991

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