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:

Opioid Pain Medication

Drugs, including both natural and synthetic substances, that are used to relieve pain by acting on the opioid receptors in the brain.

Tolerance

The body's reduced reaction to a drug or a stimulus after repeated exposure, often leading to a need for increased dosage.

Compliance

The degree to which a patient follows medical advice and adheres to prescribed treatments or interventions.

Time-Release Capsules

Medicinal capsules designed to dissolve slowly and release a drug over time to maintain a consistent level of medication in the bloodstream.