Formation Liabilities. Refer to Problem 22-25, but assume that D and E made the following contributions instead of cash. How do these new facts change your answers for each partner? a. D contributes land with a market value of $16,000. The land was acquired 10 months ago for $9,000 cash and a $6,000 note payable (recourse debt). The $6,000 note payable is also transferred to the partnership. b. E contributes land with a market value of $18,000. E received the land three years ago as a gift from a relative and has a basis of $5,000. In addition, E trans- fers an $8,000 mortgage (nonrecourse debt) on the land to the partnership. formed by five individuals part- and (4) the holding period of the partnership interest for the partner and the assets 22-25 Formation-No Liabilities. The A-E Partnership is being who each contribute assets in exchange for a 20% capital and profit/lo Calculate the following for each partner: (1) recognized gain or loss, (2) each ner's basis in his or her partnership interest, (3) the partnership's basis for each ss for the partnership. Assume all contributed assets will be used in the partnership's cost $16,000 when purchased four years ago, and A's adjusted basis in the fur- b. B contributes business equipment with a market value of $10,000. The equip- trade or business. tan ess frnture with a market value of $1000 The furninun niture is $5,000. ment cost $20,000 when purchased two years ago, and B's adjusted basis in the c. C contributes business inventory with a market value of $10,000. The inventory equipment is $12,000. cost $9,000 when purchased 16 months ago. d. D and E contribute $10,000 cash each. Formation Liabilities. Refer to Problem 22-25, but assume that D and E made the following contributions instead of cash. How do these new facts change your answers for each partner? a. D contributes land with a market value of $16,000. The land was acquired 10 months ago for $9,000 cash and a $6,000 note payable (recourse debt). The $6,000 note payable is also transferred to the partnership. b. E contributes land with a market value of $18,000. E received the land three years ago as a gift from a relative and has a basis of $5,000. In addition, E trans- fers an $8,000 mortgage (nonrecourse debt) on the land to the partnership. formed by five individuals part- and (4) the holding period of the partnership interest for the partner and the assets 22-25 Formation-No Liabilities. The A-E Partnership is being who each contribute assets in exchange for a 20% capital and profit/lo Calculate the following for each partner: (1) recognized gain or loss, (2) each ner's basis in his or her partnership interest, (3) the partnership's basis for each ss for the partnership. Assume all contributed assets will be used in the partnership's cost $16,000 when purchased four years ago, and A's adjusted basis in the fur- b. B contributes business equipment with a market value of $10,000. The equip- trade or business. tan ess frnture with a market value of $1000 The furninun niture is $5,000. ment cost $20,000 when purchased two years ago, and B's adjusted basis in the c. C contributes business inventory with a market value of $10,000. The inventory equipment is $12,000. cost $9,000 when purchased 16 months ago. d. D and E contribute $10,000 cash each
