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Dewey and Morgan form a partnership where they are equal partners for all purposes. Morgan contributes depreciable property with a book value of $30,000 and
Dewey and Morgan form a partnership where they are equal partners for all purposes. Morgan contributes depreciable property with a book value of $30,000 and a tax basis of $10,000 at the time of contribution. The property had been depreciated straight-line with no salvage value over 10 years and the property has 2 years left of its recovery period. Assume the partnership has $60,000 of taxable ordinary income without including depreciation deductions. If the partnership uses the Traditional Method with Curative Alloctions, how much taxable ordinary income will need to be allocated away from Dewey and towards Morgan as a curative allocation each year to compensate Dewey for the book-tax disparity in depreciation deductions for Dewey
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