In the Current Year, Derek Formed an Equal Partnership with Cody

question 12

Essay

In the current year, Derek formed an equal partnership with Cody. Derek contributed land with an adjusted basis of $110,000 and a fair market value of $200,000. Derek also contributed $50,000 cash to the partnership. Cody contributed land with an adjusted basis of $80,000 and a fair market value of $230,000. The land contributed by Derek was encumbered by a $60,000 nonrecourse debt. The land contributed by Cody was encumbered by $40,000 of nonrecourse debt. Assume the partners share debt equally. Immediately after the formation, what is the basis of Cody's partnership interest?

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Definitions:

Forgery

The process of making, adapting, or imitating objects, statistics, or documents with the intent to deceive.

Bank Statement

A document or electronic record issued by a bank detailing the transactions in a customer's account over a specific period.

Oral Stop Payment Order

A verbal instruction to a financial institution to not pay out or process a specific check or transaction.

Electronic Fund Systems

Systems that enable the electronic transfer of money from one bank account to another without the direct involvement of bank staff.