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Hi, I have a question and I would like to know the process to solve it. Suppose three partners John, Michael and Nicole each contribute
Hi, I have a question and I would like to know the process to solve it.
- Suppose three partners John, Michael and Nicole each contribute cash of $10,000 to an XYZ partnership for interest. In addition, Nicole contributes land with a fair market value of $150,000 and an adjusted basis of $20,000 to XYZ. The land had a $40,000 mortgage. Furthermore, prior to contribution XYZ had 10, 000 nonrecourse bank loan. In this case,
- 1) What is the Partnerships basis in the contributed asset?
- 2) What is each Partners inside basis in the contributed asset?
Please explain the process. I have an exam tomorrow.
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