three equal partners formed partnership XYZ by each contributing $100,000 to the partnership. In the first...
three equal partners formed partnership XYZ by each contributing $100,000 to the partnership. In the first year of operations, an $800,000 rental property was purchased in exchange for $200,000 in cash and a $600,000 recourse obligation. The partnership earned net income of $30,000 in its first year. What amount was each partner's basis in the partnership at the end of the first year?
Homework Answers
The parters basis would include their capital contribution, share in the rental property and the net income earned by them.
Each partner contribution = $100000 + $(800000-600000)/3 + $30000/3
= $110000+ $66667
= $176667
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interest, assuming that both AB and YZ are general partners.
Compute each partner’s initial basis...
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construct a shopping mall. AB contributed $641,000 cash, and YZ
contributed land ($641,000 FMV and $571,000 basis) in exchange for
a 50 percent interest in ABYZ Partnership. Immediately after its
formation, ABYZ borrowed $320,500 from a local bank. The debt is
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interest, assuming that both AB and YZ are general partners.
Compute each partner’s initial basis...
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