Laurel and Hardy form a 50/50 partnership (HaHa Partners) in 2018. Laurel contributes land with a fair market value of $700,000 and an adjusted basis of $500,000. The land is subject to a $250,000 mortgage which the partnership assumes. Hardy contributes $450,000 of cash. Determine Laurel’s outside basis and Hardy’s outside basis after each of them has contributed their property and cash to form the partnership.
Laurel and Hardy form a 50/50 partnership (HaHa Partners) in 2018. Laurel contributes land with a fair market value of $700,000 and an adjusted basis of $500,000. The land is subject to a $250,000 mortgage which the partnership assumes. Hardy contributes $450,000 of cash. Determine Laurel’s outside basis and Hardy’s outside basis after each of them has contributed their property and cash to form the partnership.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Laurel and Hardy form a 50/50
Determine Laurel’s outside basis and Hardy’s outside basis after each of them has contributed their property and cash to form the partnership.
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