Ed contributes land
which he held for four years as an investment to the EFGH
Partnership on March 1, 2018, in exchange for a 20% interest in the
partnership. At the time Ed contributed the property, it had
a fair market value of $60,000 and an adjusted basis to
Ed of $95,000. EFGH is a real
estate developer and holds the land as inventory.
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- If the partnership sells the land Ed contributed for $52,000 on
July 1, 2019, how much, and what type(s), of gain or loss are
recognized?
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- Assume the same facts as above except that the fair market
value of the land on March 1, 2018, was $110,000 and it is sold for
$120,000 on July 1, 2019. How much, and what
type(s) of gain or loss are recognized?
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- Assume the same facts as above, except that the fair market
value of the land is $110,000 on March 1, 2018, and that the land
is distributed in September 2019, to one of the other partners when
its FMV is $140,000. How much gain, if any, must Ed recognize
and what effect does it have on his outside
basis?
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- Assume that Ed held the land as inventory and the partnership
holds the land as an investment. If the land had a basis of $60,000
and a fair market value of $110,000 when Ed contributed it on March
1, 2018, how much, and what type(s), of gain or loss are recognized
if the partnership sells the land for $125,000 on July 1,
2019?