Basis in Parternship Interest: What is Kelly\'s basis for her partnership intere

Question

Basis in Parternship Interest: What is Kelly's basis for her partnership interest in each of the following independent situations? The partners share the economic risk of loss from the recourse liabilities according to their partnership interests.

A) Kelly receives her 20% partnership interest for a contribution of property having a 14,000 basis and a 17,000 FMV. The partnership assumes her 10,000 recourse liability but has no other debts

B) Kelly receives her 20% partnership interest as a gift from a friend. The friends bases (without considering partnership liabilities) is 34,000. The FMV of the interest at the time of the gift is 36,000. The partnership has liabilities of 100,000 when Kelly receives her interest. No gift tax was paid with respect to the transfer.

C) Kelly inherits her 20% interest from her mother. Her mother's basis was 140,000. The FMV of the interest is 120,000 on the date of death and 160,000 on the alternate valuation date. The executor chooses the date of death for valuing the estate. The partnership has no liabilities.

Explanation / Answer

A) kellys interest : = 17000

liablility 10000*.2 = 2000

total interest = 15000

B) interest in partnership = 36000

liablitity 100000*.2 = 20000

interest = 16000

C) 160000

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