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?

---

Definitions:

Antecedents

Events or conditions that precede and influence behavior, actions, or outcomes.

Team Unity

The sense of solidarity or cohesiveness among members of a team, often leading to better performance and cooperation.

Team Confidence

The collective belief of a team in their abilities to achieve their goals and perform successfully.

Team Goal Setting

The process of defining specific, measurable, achievable, relevant, and time-bound objectives for a group or team to achieve collectively.