lex, Tim, and Jeff form a partnership and contribute the following assets: FMV B

Question

lex, Tim, and Jeff form a partnership and contribute the following assets: FMV Basis Partnership % Alex’s inventory $45,000 $20,000 33.3% Tim’s Building $175,000 $150,000 33.3% Jeff’s Acct. Rec. $50,000 $0 33.3% Tim's building has a mortgage of $135,000 which the partnership assumes. QUESTIONS - Your answers must be placed in the appropriate block and must be complete per the instructions for each: A. Do any of the partners recognize any gain? If so, how much and why? B. What is each partner's basis in his or her partnership interest? SHOW YOUR CALCULATIONS C. What is the basis to the partnership in each asset? SHOW YOUR CALCULATIONS D. How would your answer change with respect to Tim if his basis in the building was $85,000? SHOW YOUR CALCULATIONS

Explanation / Answer

FMV Basis Partnership % Mortgage Alex’s inventory $ 45,000 $ 20,000 33.33% Tim’s Building $ 175,000 $ 150,000 33.33% $ 135,000 Jeff’s Acct. Rec. $ 50,000 $ 0 33.33% A- Alex's unrecognised gain(45000-20000 = 25000) Tims unrecognised gain(175000-150000 = 25000) B Alex's 20000 Tim's 15000 (150000-135000) Jeff's 50000 C same aspartners basis D Tim's 0 (85000-135000)

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

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