Question: 16. At partnership inception, Black acquires a 50% interest in Decorators Partnership by contributing property with an adjusted basis of $80,000. Black recognizes a gain

16. At partnership inception, Black acquires a 50% interest in Decorators Partnership by contributing property with an adjusted basis of $80,000. Black recognizes a gain if I. The fair market value of the contributed property exceeds its adjusted basis.

II. The property is encumbered by a mortgage with a balance of $100,000.

a. I only.

b. II only.

c. Both I and II.

d. Neither I nor II.

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