Partnership in the firm of ambrose-nectar

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On July 1, 2014, Ambrose was admitted to partnership in the firm of Ambrose & Nectar. His contribution to capital consisted of 500 shares of stock in Paniculata Corporation, which he bought in 1990 for $10,000 & which had a fair market value of $50,000 on July 1, 2014. Ambrose's interest in the partnership's capital and profits is 25%. On July 1, 2014, the fair market value of the partnership's net assets (after Ambrose was admitted) was $200,000. What is Ambrose's taxable gain in 2014 on the exchange of stock for his partnership interest? $0 gain or loss $40,000 ordinary income $40,000 long-term capital gain ("LTCG") $40,000 Section 1231 gain None of the other provided choices

Reference no: EM13984354

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Partnership in the firm of ambrose-nectar : On July 1, 2014, Ambrose was admitted to partnership in the firm of Ambrose & Nectar. His contribution to capital consisted of 500 shares of stock in Paniculata Corporation
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