63) Patience contributes cash of $40,000 and property having fair market value $
ID: 2437262 • Letter: 6
Question
63) Patience contributes cash of $40,000 and property having fair market value $220,000 with an adjusted basis of $60,000 to the BnS partnership. How much is Patience's basis in the intership?
64) using the same facts as above (Q 63), patience also received a partnership interest worth $45,000 for services rendered tot he partnership.
A.) Does patience have an adjusted basis?
B.) How much is patience basis given the additional circumstances?
C.) How much ordinary income is recognized?
65) Using the same facts as above (Q64) Patience receives $20,000 cash distribution. What is Patience new basis, if any?
66) Using the same facts as above (Q 65), if the cash distribution was $160,000 instead of $20,000, what is (i) Patience partnership interest and (ii) explain why? (iii) what is Patience taxable gain or loss?
Explanation / Answer
63.
Patience's basis in the partnership = Cash contributed + Adjusted basis in the property contributed
Therefore,
Patience's basis in the partnership = $40,000 + $60,000 = $100,000
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