Danson and Ellerby are equal partners in DE Partnership, which is in the business of selling fine art. DE owns assets with a tax basis and fair market value of $240,000. In January of the current year, Finley contributes to the partnership some personal investment art with a fair market value of $120,000 (tax basis $80,000) to become a one third partner in the new DEF partnership. In October of the current year, DEF sells the art received from Finley for $141,000.
What amount of gain from the sale of the artwork should be allocated to Finley?

Finley's part is 7000.

Explanation:

Income distribution in a partnership is equal to the proportion of partner's stake in owner's capital. Since total amount of capital or fair market value of investment is 360,000 dollars, than Finley has 1/3 of part in that company's owner's capital. With the art sold for 141,000 dollars and which was acquired by Finley and brought into partnership deal for 120,000 dollars, remaining difference of 21,000 will be divided into three equal parts. Therefore, Finley's part is 7000.

i'ts proportional. if the inflation rate is 12% for example, the cpi will be 12% less.

hope it ,

bioteacher101

the correct answer is:     [c]:     " cyclical unemployment " .