Elise Contributes Property Having a $60,000 FMV and a $25,000

question 1399

Essay

Elise contributes property having a $60,000 FMV and a $25,000 adjusted basis and also renders accounting services valued at $30,000 in exchange for an 80% interest in the capital and profits of the EEE partnership. Evan contributes a building with a $90,000 FMV, an adjusted basis of $55,000, and subject to a mortgage of $70,000 for a 20% interest in the capital and profits of the EEE partnership. The partnership assumes the mortgage.
a. What is each partner's respective basis in the partnership?
b. What are the income tax consequences of the contributions?
c. What is the partnership's basis in the assets transferred in by Elise and Evan?

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Definitions:

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Wireless networking technologies that provide internet access and communications over short distances without the need for physical connections.

Aggregates

Materials or items combined together to form a total quantity, commonly used in construction (like gravel and sand) or as a term in software for clustering individual items.

Mobile Users

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RFID Technology

Radio-Frequency Identification, a technology using electromagnetic fields to automatically identify and track tags attached to objects.