1. A, B and C, three individuals, form a general partnership by contributing the following property in exchange for equal 1/3 interests in the partnership's capital, profits, and losses: A contributes land, a capital asset that A acquired several years ago, worth $100 in which A has a tax basis of $40. contributes machinery with a basis of $25 and a value of $60, plus $40 in cash. purchased the machinery several years ago for $75 and has taken $50 of depreciation. contributes inventory with a value of $100 in which has a basis of $90. What gain and/or loss will be recognized by the partners and the partnership on formation? What will be the partnership's "inside basis" and holding period for each of the contributed assets? What will be the partners' "outside bases" and holding period for their partnership interests?
1. A, B and C, three individuals, form a general partnership by contributing the following property in exchange for equal 1/3 interests in the partnership's capital, profits, and losses: A contributes land, a capital asset that A acquired several years ago, worth $100 in which A has a tax basis of $40. contributes machinery with a basis of $25 and a value of $60, plus $40 in cash. purchased the machinery several years ago for $75 and has taken $50 of depreciation. contributes inventory with a value of $100 in which has a basis of $90. What gain and/or loss will be recognized by the partners and the partnership on formation? What will be the partnership's "inside basis" and holding period for each of the contributed assets? What will be the partners' "outside bases" and holding period for their partnership interests?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter18: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 13P
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Transcribed Image Text:1. A, B and C, three individuals, form a general partnership by contributing the following property in exchange for equal
1/3 interests in the partnership's capital, profits, and losses: A contributes land, a capital asset that A acquired several years
ago, worth $100 in which A has a tax basis of $40. contributes machinery with a basis of $25 and a value of $60, plus
$40 in cash. purchased the machinery several years ago for $75 and has taken $50 of depreciation. contributes
inventory with a value of $100 in which has a basis of $90. What gain and/or loss will be recognized by the partners
and the partnership on formation? What will be the partnership's "inside basis" and holding period for each of the
contributed assets? What will be the partners' "outside bases" and holding period for their partnership interests?
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