Question

Partner A contributed land (basis $40,000, fmv $50,000) for interest in partnership; B contributed services (fmv $50,000). What is each partner’s basis in partnership and partnership’s basis in land? Explain. How would this change if the partnership borrowed $40,000?

Answer 1

Partnership Distributions. ... When a partner contributes property to the partnership, the partnership's basis in the contributed property is equal to its fair market value ( FMV ).

Each partners basis in the partnership is $50,000 each since both of them Rendered a capital of 50000$

Nonrecourse liabilities can provide basis for distributions, but generally do not provide basis for purposes of the at-risk rules

In case if the firm borrows $40000 still the basis would not change