Jane Contributes Land with an FMV of $100,000 and a Basis

question 112

Essay

Jane contributes land with an FMV of $100,000 and a basis of $80,000 to the Green Partnership in exchange for a 25% partnership interest. The partnership assumes the $40,000 mortgage on the land. Mary has a 25% share of partnership liabilities. The Green Partnership has $8,000 in liabilities immediately before Jane's contribution. What is Jane's basis in her partnership interest?

---

Definitions:

Prescriptive

An approach or method that provides specific instructions, rules, or recommendations to achieve a particular outcome.

Disclosure

The act of making new or important information known, especially about financial operations or conditions.

AASB 114

Australian Accounting Standards Board ruling 114, which sets guidelines for segment reporting by financial entities.

AASB 8/IFRS 8

Operating Segments, a standard that requires entities to disclose information about their operating segments, products, services, and geographical areas.