Question

3. On January 1 of the current year, Anna and Jason form an equal partnership. Anna...

3. On January 1 of the current year, Anna and Jason form an equal partnership. Anna contributes $50,000 cash and a parcel of land (adjusted basis of $200,000; fair market value of $150,000) in exchange for her interest in the partnership. Jason contributes property (adjusted basis of $180,000; fair market value of $200,000) in exchange for his partnership interest. Which of the following statements is true concerning the income tax results of this partnership formation?

a. Jason recognizes a $20,000 gain on his property transfer.

b. Jason has a $200,000 tax basis for his partnership interest.

c. Anna has a $200,000 tax basis for her partnership interest.

d. Anna realizes and recognizes a $50,000 loss.

e. The partnership has a $200,000 adjusted basis in the land contributed by Anna

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer E :

The partnership has a $200,000 adjusted basis in the land contributed by Anna

In the given situation Rule 722 and 723 will apply, Jason's basis for his partnership interest will be the same as his $ 1,80,000 basis for the property contributed, Anna will have $ 1,50,000 tax basis for her partnership interest,.

So the Land Contributed by anna is 2,00000 and neither of both partners will not recognize neither gain or loss on there property contribution.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
C, Anna, and Leo formed a calendar year partnership. Profits and losses are to be shared...
C, Anna, and Leo formed a calendar year partnership. Profits and losses are to be shared equally by the three partners. C contributed equipment that had an adjusted basis to him of $500,000 and a fair market value of $600,000. The partnership assumed C's debt of $180,000 on the equipment. What is the basis of C's partnership interest? What is the partnership's basis in the equipment?
On March 1, 2019, George and James form the GJ General Partnership in which they will...
On March 1, 2019, George and James form the GJ General Partnership in which they will share profits and losses equally. George contributes $600,000 in cash and James contributes land with an adjusted basis of $400,000 and a fair market value of $750,000. The land is subject to a qualified nonrecourse mortgage of $150,000. Required: How much gain or loss will George, James and the partnership recognize upon the formation of the partnership? Determine each partner’s basis in his partnership...
George and James are forming the GJ Partnership. George contributes $600,000 cash and James contributes nondepreciable...
George and James are forming the GJ Partnership. George contributes $600,000 cash and James contributes nondepreciable property with an adjusted basis of $500,000 and a fair market value of $950,000. The property is subject to a $200,000 liability, which is also transferred into the partnership and is shared equally by the partners for basis purposes. George and James share in all partnership profits equally except for any precontribution gain, which must be allocated according to the statutory rules for built-in...
On March 1, 2019, George and James form the GJ General Partnership in which they will...
On March 1, 2019, George and James form the GJ General Partnership in which they will share profits and losses equally. George contributes $600,000 in cash and James contributes land with an adjusted basis of $400,000 and a fair market value of $750,000. The land is subject to a qualified nonrecourse mortgage of $150,000. Required: a.   How much gain or loss will George, James and the partnership recognize upon the formation of the partnership? b.   Determine each partner’s basis in...
George and James are forming the GJ Partnership. George contributes $600,000 cash and James contributes non-depreciable...
George and James are forming the GJ Partnership. George contributes $600,000 cash and James contributes non-depreciable property with an adjusted basis of $500,000 and a fair market value of $950,000. The property is subject to a $200,000 liability, which is also transferred into the partnership and is shared equally by the partners for basis purposes. George and James share in all partnership profits equally except for any pre-contribution gain, which must be allocated according to the statutory rules for built-in...
Brandon and Celia are forming the BC Partnership. Brandon contributes $20,000 cash and Celia contributes nondepreciable...
Brandon and Celia are forming the BC Partnership. Brandon contributes $20,000 cash and Celia contributes nondepreciable property with an adjusted basis of $18,000 and a fair market value of $30,000. The property is subject to a $10,000 liability which is also transferred into the partnership and is shared equally by the partners for basis purposes. Brandon and Celia share in all partnership profits equally except for any precontribution gain which must be allocated according to the statutory rules required for...
On June 1 of the current tax year, Elisha and Ezra (who are equal partners) contribute...
On June 1 of the current tax year, Elisha and Ezra (who are equal partners) contribute property to form the Double E Partnership. Elisha contributes cash of $200,000. Ezra contributes a building and land with an adjusted basis and fair market value of $340,000, subject to a liability of $140,000. The partnership borrows $20,000 to finance construction of a parking lot in front of the building. At the end of the first year (December 31), the accrual basis partnership owes...
ABC Partnership was formed on March 1 of the current year by three individuals. A contributed...
ABC Partnership was formed on March 1 of the current year by three individuals. A contributed $20,000 cash for a 25% interest. B contributed property with an adjusted basis of $28,000 and fair market value of $32,000, subject to a $12,000 mortgage. C contributed property with an adjusted basis of $20,000 and fair market value of $64,000, subject to a $24,000 liability. B and C received 25% and 50% partnership interests, respectively. The partnership assumed both partners' liabilities. The partnership...
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. Determine the tax consequences to Zoe for the contribution of property to the partnership. What are the partnership’s tax consequences? What is each partner’s basis in the partnership interest? What is the partnership’s basis in the property?
Afrah contributed land to the Balsam LLC. Her basis in the land was $781,000. The fair...
Afrah contributed land to the Balsam LLC. Her basis in the land was $781,000. The fair market value at the contribution date was $886,000. This year, the LLC distributes other property with an adjusted basis of $219,000 and fair market value of $280,000 to Afrah. Afrah's basis in her LLC interest was $224,000 immediately before the distribution. As a result of the distribution in this year, how much gain does Afrah recognize, how much is her basis in her LLC...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT