Question

Jim and Angie form the JAZ partnership with Zoe by contributing $75,000 each to partnership equity....

Jim and Angie form the JAZ partnership with Zoe by contributing $75,000 each to partnership equity. Zoe, the third partner, contributes property with a basis of $50,000 and fair market value of $75,000. The three are equal partners in the partnership.

  1. Determine the tax consequences to Zoe for the contribution of property to the partnership.
  2. What are the partnership’s tax consequences?
  3. What is each partner’s basis in the partnership interest?
  4. What is the partnership’s basis in the property?
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Answer #1

A) For Gaining the partnership Interest , any transfer of Property to the Partnership from the partner no gain or loss are recognized. So No gain to be recognized by ZOE

B) The basis of partner’s interest in partnership determines by the basis of the property, money that they transferred to the partnership.

C) , Jim and Angie’s basis are $75,000 each and Zoe’s basis is $50,000.

D )The partnership’s basis would be total of $200,000 ($50,000 Zoe+$75,000 Jim+$75,000 Angie)

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