Kevin - 40% profit & loss ratio.Kevin contributed machinery valued at $80,000.The machine was acquired on 1/1/2011 at a cost of $120,000.The machine originally had a ten year life (5 years left @1/1/2016) and is depreciated on the straight-line method using a 10 year life at the rate of $12,000 of depreciation per year.Accumulated depreciation of $60,000 had been properlyclaimed from 1/1/2011 through 12/31/2015, so the machine had a net tax basis of $60,000 ($120,000 cost less $60,000 accumulated depreciation through 12/31/2015) as of the date it was contributed to the partnership.

The partnership keeps its books on the tax basis method

You need to make a journal entry to record Kevin's capital contribution as of 1/1/2016.