18- Mark and Addison formed a partnership. Mark received a 25% interest in partnership capital and profits in exchange for land with a basis of $40,000 and a fair market value of $60,000. Addison received a 75% interest in partnership capital and profits in exchange for $180,000 of cash. Three years after the contribution date, the land contributed by Mark is sold by the partnership to a third party for $76,000. How much taxable gain will Mark recognize from the sale?

a.$9,000

b.$16,000

c.$0

d.$24,000

19- An S corporation is subject to the following tax(es).

a.Alternative minimum tax.

b.Corporate income tax.

c.Built-in gains tax.

d.None of these choices are correct.

20- This year, Jiang, the sole shareholder of a calendar year S corporation, received a distribution of $17,000. On December 31 of the prior year, his stock basis was $3,000. The corporation earned $12,000 ordinary income during the year. It has a zero balance in accumulated E&P. Which statement is correct? Ignore the 20% QBI deduction.

a.Jiang's stock basis will be $2,000.

b.Jiang's ordinary income is $15,000.

c.Jiang recognizes a $2,000 LTCG.

d.Jiang's return of capital is $11,000.