Crystal Contributes Land to the Newly Formed CD Partnership in Exchange

question 122

Essay

Crystal contributes land to the newly formed CD Partnership in exchange for a 40% interest.The land has an adjusted basis and fair market value of $200,000 and is subject to a liability of $50,000, which the partnership assumes.None of this liability is repaid at year-end.At the end of the year, the partnership has trade accounts payable of $60,000.Assume all liabilities are allocated proportionately to the partners.Total partnership income for the year is $300,000.What is Crystal's basis in her partnership interest at the end of the year?

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