The JM Partnership was formed to acquire land and subdivide it as residential housing lots. On March 1, 2019, Jessica contributed land valued at $630,000 to the partnership in exchange for a 50% interest. She had purchased the land in 2011 for $441,000 and held it for investment purposes (capital asset).
The JM
On the same date, Matt contributed land valued at $630,000 that he had purchased in 2009 for $756,000. He became a 50% owner. Matt is a real estate developer, but he held this land personally for investment purposes. The partnership holds this land as inventory.
In 2020, the partnership sells the land contributed by Jessica for $661,500. In 2021, the partnership sells the real estate contributed by Matt for $598,500.
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