1. Barbara and Bill formed an equal partnership, B&B, a general partnership, on January 1, 2015. Barbara contributed $100,000 in exchange for her one-half interest. Bill contributed land worth $100,000 that had an adjusted basis to him of $30,000 in exchange for his one-half interest. Which of the following statements is accurate with respect to this transaction?

a. None of Barbara, Bill, or B&B recognized any gain or loss.

b. Bill recognized gain of $70,000 , but Barbara and B&B did not recognize any gain or loss.

c.   B&B recognized gain of $70,000 , but Barbara and Bill did not recognize any gain or loss.

d.   Bill and B&B each recognized $70,000 of gain, but Barbara did not recognize any gain or loss.

2. Which of the following decreases a partner’s basis in the partner’s partnership interest?

a. Additional contributions the partner makes during the year

b. The partner’s allocable share of tax-exempt income

c. The partner’s allocable share of partnership items of income and gain

d. Cash distributions to the partner during the year

3. Jim, one of two equal partners of the JJ Partnership, a general partnership, contributed property used in his trade or business property with an adjusted basis to him of $15,000 and a fair market value of $10,000 to the JJ Partnership. Jim’s capital account was credited with $10,000. The property later was sold for $12,000. As a result of this sale, how much gain or loss is allocable to Jim?

a. $1,000 gain

b. $1,500 loss

c. $2,000 gain

d. $3,000 loss