Sarah Contributed Fully Depreciated ($0 Basis) Property Valued at $50,000

question 38

Essay

Sarah contributed fully depreciated ($0 basis) property valued at $50,000 to the RSTU Partnership in exchange for a
25% interest in partnership capital and profits. During the first year of partnership operations, RSTU had net taxable income of $200,000 and tax-exempt income of $4,000. The partnership distributed $10,000 cash to Sarah. Her share of partnership recourse liabilities on the last day of the partnership year was $20,000. What is Sarah's adjusted basis (outside basis) for her partnership interest at the end of the tax year?

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Definitions:

Voluntary Turnover

The act of an employee leaving an organization based on their own decision, often for reasons such as better job opportunities, dissatisfaction, or personal circumstances.

Conflicting Opinions

Refers to situations where individuals or groups have differing beliefs, perspectives, or opinions on a particular subject.

360-Degree Feedback

A multi-rater feedback system where employees receive confidential, anonymous feedback from the people who work around them, including peers, supervisors, and direct reports.

Multiple Raters

Involves using several individuals to assess or evaluate employee performance, to increase reliability and objectivity of the evaluation.