Question
I need help with this question for my accounting 3486 Federal taxation course that uses the book Pearson's 2019 Federal Taxation for individuals. Kay and
I need help with this question for my accounting 3486 Federal taxation course that uses the book Pearson's 2019 Federal Taxation for individuals.
Kay and Larry each contribute property to become equal partners in the KL General Partnership. Kay contributes office furniture with an adjusted basis of $40,000 and a fair market value of $50,000, which she has depreciated using (MACRS). Larry contributes land with a basis of $60,000 and a fair market value of $50,000, which he had been holding as an investment. The partnership will use the land as a parking lot for their business.
a) What is the partnership basis in each of the two pieces of property?
b)If the land that Larry contributed is sold four years after the contribution for $45,000, What is the amount and character of the gain or loss which Larry should report?
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