Chapter 15, Problem 15.15AQ

To determine

Tax basis of asset investment: for the capital investments, the accounting basis and the tax basis are computed differently. For tax purposes, a partnership must value the assets invested in it at the tax basis of the individual partner who invested the asset.

The tax valuation is different from the amount that is recognized under GAAP. A basic GAAP concept is to value asset transfers between separate reporting entities at their respective fair values.

the basis of H’s contribution for tax purpose and GAAP purpose