Realize Your Potential: H&R Block

$12/29/23,9$:$22$ AM

At the beginning of $2022,$ Francisco owned a $50\%$ interest in a partnership. During the year, he contributed equipment with a fair market value of $$14,000$ to the partnership. At the time, his adjusted basis in the equipment was $$10,000.$ Neither Francisco nor the partnership recognized any gain when the equipment was contributed.

How does this contribution affect Francisco's outside basis?

It decreases by $$10,000.$

It increases by $$10,000.$

It increases by $$14,000.$

It is not impacted by the contribution.Mm