McKenzie and Tyler form the MT General Partnership as equal partners. They make the following contributions: (Click the icon to view the contributions.) The MT Partnership assumes the $100,000 recourse mortgage on the building that Tyler contributes, and the partners share the economic risk of loss on the mortgage equally. Tyler has claimed $34,000 in straight-line depreciation under the MACRS rules on the building. McKenzie is a stockbroker and contributed securities from her inventory. The partnership will hold them as an investment. . Requirement b. What is each partner's basis in his or her partnership interest? Data table Basis in Individual Partnership Interest Individual Asset Basis to Partner FMV McKenzie Tyler McKenzie Cash $ 65,000 $ 65,000 Inventory (securities) 16,000 18,000 Requirement c and d. What is the partnership's basis in each asset? What is the partnership's initial book value of each asset? Tyler Land 45,000 Partnership's Basis in Asset Initial Book Value of Asset 50,000 65,000 Building 85,000 Asset Cash 65000 65000 16000 18000 Print Done Inventory Land Building 50000 45000 65000 85000 Requirement e. The partnership holds the securities for two years and then sells them for $22,500. What amount and character of gain must the partnership and each partner report? (Enter a loss with a minus sign or parentheses.) Begin by calculating the gain or loss realized on the sale of the securities. Proceeds from sale of securities Adjusted basis Realized gain (loss) 16000 McKenzie and Tyler form the MT General Partnership as equal partners. They make the following contributions: (Click the icon to view the contributions.) The MT Partnership assumes the $100,000 recourse mortgage on the building that Tyler contributes, and the partners share the economic risk of loss on the mortgage equally. Tyler has claimed $34,000 in straight-line depreciation under the MACRS rules on the building. McKenzie is a stockbroker and contributed securities from her inventory. The partnership will hold them as an investment. . Requirement b. What is each partner's basis in his or her partnership interest? Data table Basis in Individual Partnership Interest Individual Asset Basis to Partner FMV McKenzie Tyler McKenzie Cash $ 65,000 $ 65,000 Inventory (securities) 16,000 18,000 Requirement c and d. What is the partnership's basis in each asset? What is the partnership's initial book value of each asset? Tyler Land 45,000 Partnership's Basis in Asset Initial Book Value of Asset 50,000 65,000 Building 85,000 Asset Cash 65000 65000 16000 18000 Print Done Inventory Land Building 50000 45000 65000 85000 Requirement e. The partnership holds the securities for two years and then sells them for $22,500. What amount and character of gain must the partnership and each partner report? (Enter a loss with a minus sign or parentheses.) Begin by calculating the gain or loss realized on the sale of the securities. Proceeds from sale of securities Adjusted basis Realized gain (loss) 16000
