Ola Associates is a limited partnership engaged in real estate development. Hoff, a civil engineer, billed Ola $40,000 in 2007 for consulting services rendered. In full settlement of this invoice, Hoff accepted a $15,000 cash payment plus the following:
|
Fair market value |
Carrying amount on Ola’s books |
|
|
3% limited partnership interest in Ola |
$10,000 |
N/A |
|
Surveying equipment |
7,000 |
$3,000 |
What amount should Hoff, a cash-basis taxpayer, report in his 2007 return as income for the services rendered to Ola?
- $15,000
- $28,000
- $32,000
- $40,000