Elise Contributes Property Having a $60,000 FMV and a $30,000

question 1

Essay

Elise contributes property having a $60,000 FMV and a $30,000 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:

Total Factory Overhead Costs

The cumulative costs associated with the indirect manufacturing processes, including indirect labor, materials, and other expenses.

Account Information

Details related to financial transactions or balances within a specific account, used for monitoring and management purposes.

Schedule of Cost of Goods Manufactured

A detailed statement showing the total production costs incurred in making products that are completed during a specific accounting period.

Raw Materials Inventory

The total cost of all the raw materials that are currently stored by a company and yet to be used in production.