Lets assume one of your clients is a partnership. They called to ask a few questions. One of the existing partners wants to contribute property having a basis less than its FMV to the partnership for an additional interest in the partnership. How would you respond to their questions listed below?

a.Should he/she contribute the property to the partnership? Why or why not?

b. What other options do they have?

c. Explain the tax implication for the partner of these other options.