Darlene, Eric, and Francis form an equal partnership (DEF). They contributed the following assets: Darlene contributes equipment (FMV = $9,000; basis = $9,000); goodwill (FMV = $15,000; basis = $0); accounts receivable (FMV = $3,000; basis = $0). Darlene has held the equipment for two years and generated the goodwill in her sole proprietorship business, which she has operated for 10 years. Eric contributes cash of $9,000; Whiteacre (FMV = $12,000; basis = $30,000); and Greenacre (FMV = $6,000; basis = $1,500). Eric has held the properties for 3 years prior to contribution. Francis contributes cash of $21,000 and Blackacre (FMV = $6,000; basis = $3,000). Francis held Blackacre for 6 months prior to contribution. Construct an opening tax balance sheet for the DEF partnership. Assets Book Tax Liabilities Book Tax Capital Totals What will be the partners’ “outside bases” and holding period for their partnership interests?
Darlene, Eric, and Francis form an equal partnership (DEF). They contributed the following assets: Darlene contributes equipment (FMV = $9,000; basis = $9,000); goodwill (FMV = $15,000; basis = $0); accounts receivable (FMV = $3,000; basis = $0). Darlene has held the equipment for two years and generated the goodwill in her sole proprietorship business, which she has operated for 10 years. Eric contributes cash of $9,000; Whiteacre (FMV = $12,000; basis = $30,000); and Greenacre (FMV = $6,000; basis = $1,500). Eric has held the properties for 3 years prior to contribution. Francis contributes cash of $21,000 and Blackacre (FMV = $6,000; basis = $3,000). Francis held Blackacre for 6 months prior to contribution. Construct an opening tax balance sheet for the DEF partnership. Assets Book Tax Liabilities Book Tax Capital Totals What will be the partners’ “outside bases” and holding period for their partnership interests?
Chapter2: Income Tax Concepts
Section: Chapter Questions
Problem 50P
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Question
- Darlene, Eric, and Francis form an equal
partnership (DEF). They contributed the following assets:
- Darlene contributes equipment (FMV = $9,000; basis = $9,000);
goodwill (FMV = $15,000; basis = $0); accounts receivable (FMV = $3,000; basis = $0). Darlene has held the equipment for two years and generated the goodwill in her sole proprietorship business, which she has operated for 10 years.
- Eric contributes cash of $9,000; Whiteacre (FMV = $12,000; basis = $30,000); and Greenacre (FMV = $6,000; basis = $1,500). Eric has held the properties for 3 years prior to contribution.
- Francis contributes cash of $21,000 and Blackacre (FMV = $6,000; basis = $3,000). Francis held Blackacre for 6 months prior to contribution.
- Construct an opening tax
balance sheet for the DEF partnership.
|
Assets |
Book |
Tax |
Liabilities |
Book |
Tax |
|
Capital |
|||||
|
Totals |
- What will be the partners’ “outside bases” and holding period for their partnership interests?
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