Basis in Partnership Interest. Yong received a 40% general partnership interest

Question

Basis in Partnership Interest. Yong received a 40% general partnership interest in the XYZ Partnership in each of the independent situations below. In each situation, assume the general partners share the economic risk of loss related to recourse liabilities according to their partnership interests. What is Young's basis in his partnership interest? Young design the building the partnership will use for its offices. Young normally would charge a $20, 000 fee for a similar building design. Based on the other partner's contributions, the 40% interest has a FMV of $25,000. The partnership has no liabilities. Yong contributes land with a $6,000 basis and an $18,000 FMV, a car (which he has used in his business since he purchased it) with a $15,000 adjusted basis and a $6,000 FMV, and $2,000 cash. The partnership has recourse liabilities of $100, 000.

Explanation / Answer

a)Yong Income =$10,000(25,000 FMV-$15,000 cash)

$25,000 *40/100=$10,000

Basis in Partnership Interest = $10,000 Income recognized + $15,000 cash

____-_________________________________________________________________________________

b)Land =$6,000

CAR=$15,000

FMV=$9,000(6,000 + $3,000from Car)

Cash=$2,000

_____________________

Total =$32,000

Less: liabilities =$40,000

______________________

Loss   =    - 8000

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.