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 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 partnership holds the land as inventory.
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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