After a § 721 Contribution by a Partner to a Partnership

question 92

True/False

After a § 721 contribution by a partner to a partnership, the partner's basis for his or her ownership interest is the same as the basis of the assets contributed (no liabilities are involved).

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Definitions:

Straight-Line Method

A method of calculating depreciation of an asset, which spreads the cost evenly across its useful life.

Units-of-Activity Method

A depreciation method that allocates costs based on the actual usage or output of the asset rather than time.

Depletion Cost

The allocation of the cost of natural resources, such as minerals or oil, over the period they are extracted and sold.

Units Extracted

The quantity of resources, such as minerals or oil, removed from the ground or source.