During formation of Beecky partnership, Sam contributed land with an adjusted basis of $130,000 in exchange for

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During formation of Beecky partnership, Sam contributed land with an adjusted basis of $130,000 in exchange for a 25% interest in Beecky. The fair market value of the contributed property was $170,000, and the property was encumbered by a nonrecourse mortgage with a balance of $120,000. What amount of gain should Sam recognize from contributing the property into Beecky partnership?
a. $50,000
b. $40,000
c. $10,000
d. $0

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