Question

On June 1 of the current tax year, Elisha and Ezra (who are equal partners) contribute property to form the Double E Partnership. Elisha contributes cash of $465,120. Ezra contributes a building and land with an adjusted basis and fair market value of $775,200, subject to a liability of $310,080. The partnership borrows $48,450 to finance construction of a parking lot in front of the building. At the end of the first year (December 31), the accrual basis partnership owes $19,380 in trade accounts payable to various creditors. The partnership reported net income of $72,675 for the year that they share equally.

Assume that Elisha and Ezra share equally in partnership liabilities. How much is Elisha's basis in the partnership interest on December 31? Ezra's?

Round interim and final answers to whole dollars.

Elisha's basis: $
Ezra's basis:   $

Answer 1

solution Elisha's basis :- Cash Contrebution 465120 155040 24225 Addo share of the Hability on the contre buted Land share of the construction debt Share of the accounts payable debt share of partnerships taxable Income 9690 36337.5 Elisha's basis in the partnership on 690412 December 30 Ezra's bases a Land and building 725 900 (310080) 155040 24225 Less: Debt assumed by the partnership Add: share of leability on contributed land Share of contruction debt shere of accounts payable debt Share of partnership Taxable income Ezra's basis in partnership on December 30 9690 36337.5 690442