Question: On September 1, 2011, James Elton received a 25% capital interest in Bredbo Associates, a partnership, in return for services rendered plus a contribution of

On September 1, 2011, James Elton received a 25%

capital interest in Bredbo Associates, a partnership, in return for services rendered plus a contribution of assets with a basis to Elton of $25,000 and a fair market value of $40,000.

The fair market value of Elton’s 25% interest was $50,000.

How much is Elton’s basis for his interest in Bredbo?

a. $25,000

b. $35,000

c. $40,000

d. $50,000

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