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Elsa and Flynn form the EF partnership. Elsa transfers $ 9 0 0 , 0 0 0 cash. Flynn transfers land with a FMV of

Elsa and Flynn form the EF partnership. Elsa transfers $900,000 cash. Flynn transfers land with a FMV of
$1,100,000, a tax basis of $400,000, and subject to a liability of $200,000. The plan is to use Elsas cash
to construct a building on the land. Each member will be responsible for 50% of all partnership debt,
including the liability transferred by Flynn.
Complete the following steps....INDICATE WHICH PARTNER(S) ARE AFFECTED BY EACH STEP
STEP 1: SECTION 1001 EFFECT
STEP 2: SECTION 722 BASIS
STEP 3: SECTION 723 BASIS
STEP 4: SECTION 752 DEEMED RESULT(S)
STEP 5: SECTION 722 EFFECT OF SECTION 752
STEP 6: SECTION 731 EFFECT OF SECTION 752
STEP 7: SECTION 733 EFFECT OF SECTION 752

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Step 1 Section 1001 Effect Both partners are affected Elsa will recognize a gain on the cash transfer as the cash is treated as consideration received ... blur-text-image

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