Jan contributes property having a $15,000 fair market value and an $8,000 adjust

Question

Jan contributes property having a $15,000 fair market value and an $8,000 adjusted basis and also renders legal services valued at $10,000 in exchange for a 40% interest in the capital and profits of the Zed partnership. What will be the tax results to Jan?

a.no income and a partnership basis of $8,000
b.ordinary income of $18,000 and a partnership basis of $18,000
c.ordinary income of $10,000 and a partnership basis of $25,000
d.ordinary income of $10,000 and a partnership basis of $18,000
please do not guess...explain or show your work

Explanation / Answer

D is the answer

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