Sue and Andrew Form SA General Partnership

Multiple Choice

Sue and Andrew form SA general partnership. Each person receives an equal interest in the newly created partnership. Sue contributes $28,000 of cash and land with an FMV of $73,000. Her basis in the land is $38,000. Andrew contributes equipment with an FMV of $30,000 and a building with an FMV of $51,000. His basis in the equipment is $26,000, and his basis in the building is $38,000. How much gain must the SA general partnership recognize on the transfer of these assets from Sue and Andrew?

A) $0
B) $4,000
C) $48,000
D) $52,000