_____ Tax Basis: Assume the Following Data for the Partnership

Multiple Choice

_____ Tax basis: Assume the following data for the partnership of A and B:
A and B share profits and losses 75:25, respectively. C is admitted to a one-fifth interest in the capital and profits and losses of the partnership by contributing $40,000 (one-fifth of the net assets of the new firm) and assumes a one-fifth responsibility for present partnership obligations. The tax bases of A, B, and C after the admission of C are

A) $66,000, $37,000, and $52,000, respectively.
B) $69,000, $34,000, and $52,000, respectively.
C) $75,000, $40,000, and $40,000, respectively.
D) $75,000, $40,000, and $52,000, respectively.
E) $71,000, $36,000, and $48,000, respectively.