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Christina contributes property valued at $50,000 (basis of $40,000) in exchange for a 25% interest in...

Christina contributes property valued at $50,000 (basis of $40,000) in exchange for a 25% interest in the H&P L.L.C. - a Partnership. The balance 75% is owned by Chandra. If the property is later sold for $70,000, how much of total gain will be allocated to Christina. How much gain will be allocated to Chandra? Please show calculations.

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Answer #1
Selling price of property = $       70,000
Less: Basis of Property = $       40,000
Capital gain on sale = $       30,000
Capital gain should be distributed equally between partners
Gain to Christina ($30000 X 50%) = $       15,000
Gain to Chandra ($30000 X 50%) = $       15,000
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