On January 1 of this year, Cynthia and Marin formed a General Partnership with the following contributions: Cynthia Basis FMV Cash $ 450,000 $ 450,000 Marin Equipment $ 30,000 $ 50,000 Land 200,000 500,000 Liability (Recourse) (100,000) (100,000) The profit sharing ratios are Cynthia 70% and Marin 30% while the loss sharing ratios are Marin 60% and Cynthia 40%. Capital is owned 50% each. The land was contributed subject to a recourse liability. a. What is Cynthia’s basis in the partnership on the date of the contributions? b. What is Marin’s basis in the partnership on the date of the contributions? c. What is the partnership’s basis in the Cash, Equipment, and Land?
On January 1 of this year, Cynthia and Marin formed a General
Cynthia Basis FMV
Cash $ 450,000 $ 450,000
Marin
Equipment $ 30,000 $ 50,000
Land 200,000 500,000
Liability (Recourse) (100,000) (100,000)
The profit sharing ratios are Cynthia 70% and Marin 30% while the loss sharing ratios are Marin 60% and Cynthia 40%. Capital is owned 50% each. The land was contributed subject to a recourse liability.
a. What is Cynthia’s basis in the partnership on the date of the contributions?
b. What is Marin’s basis in the partnership on the date of the contributions?
c. What is the partnership’s basis in the Cash, Equipment, and Land?
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