Partnership Formations Problem

Mary and Todd form the MT Partnership, with a transfer of the following properties:

Mary$500,000 cash

Todd$500,000 FMV property

$300,000 tax basis

Both Mary and Todd receive a 50% interest in the corporate stock.

Complete the following

MaryTodd

Realized gain_____________________

Recognized gain______________________

Basis of Stock___________ __________

MT basis in contributed asset___________ ___________

VARIATION 1:In addition to Mary and Todd, Karla joins the partnership at its inception.Karla will provide services to the corporation in exchange for a 25% interest in the stock.That is, she receives 25% of the outstanding shares.Does anything change?Why or why not?

VARIATION 2:return to original facts (no Karla).Todd's property is valued at $700,000 but is contributed subject to a $200,000 liability.

Complete the following

MaryTodd

Realized gain________ ____________

Recognized gain________ ____________

Basis of stock__________ ___________

MT basis in contributed asset___________ _____________

Remember this is a partnership, and there are three sections on this questions. Thanks!