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Larry and Jessica form the L&J Partnership. Larry contributes property with an adjusted basis of $70,000, a fair market value of $200,000, and subject to
Larry and Jessica form the L&J Partnership. Larry contributes property with an adjusted basis of $70,000, a fair market value of $200,000, and subject to a liability of $80,000 in exchange for a 40 percent interest in the partnership. Jessica receives a 60 percent interest in the partnership in exchange for services performed for the partnership, valued at $10,000, and cash of $170,000.
How much income does Jessica recognize on the exchange?
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