Question
David and Goliath form the DG Partnership. Each received a one-half interest in capital and profits. David contributed land having a fair market value of
David and Goliath form the DG Partnership. Each received a one-half interest in capital and profits. David contributed land having a fair market value of $10,000. The adjusted basis of the land in the hands of David was $8,000. Goliath contributed legal and tax planning services. Immediately following the formation, the FMV of a one-half interest in the DG partnership was $10,000.
A. How much income gain will Goliath recognize as a result of his contribution?
B. How much income or gain will David recognize as a result of his contribution?
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Intermediate Accounting
Authors: kieso, weygandt and warfield.
14th Edition
9780470587232, 470587288, 470587237, 978-0470587287
