Question
Ryce contributes nondepreciable property with an adjusted basis of $60,000 and a fair market value of $95,000 to the Montgomery Partnership in exchange for a
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Ryce contributes nondepreciable property with an adjusted basis of $60,000 and a fair market value of $95,000 to the Montgomery Partnership in exchange for a one-half interest in profits and capital. In the next tax year, when the propertys fair market value is $100,000, the partnership distributes the property to Jarvis, the other one-half partner. Jarviss basis in the partnership interest was $100,000 immediately before the distribution.
Which partner must recognize a gain, what is the amount recognized, and what is the effect on that partners basis in the partnership interest? What is the effect on Jarviss basis in the nondepreciable property received?
Ryce contributes nondepreciable property with an adjusted basis of $60,000 and a fair market value of $95,000 to the Montgomery Partnership in exchange for a one-half interest in profits and capital. In the next tax year, when the propertys fair market value is $100,000, the partnership distributes the property to Jarvis, the other one-half partner. Jarviss basis in the partnership interest was $100,000 immediately before the distribution.
Which partner must recognize a gain, what is the amount recognized, and what is the effect on that partners basis in the partnership interest? What is the effect on Jarviss basis in the nondepreciable property received?
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Auditing And Assurance Services An Integrated Approach
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley
17th Edition
013517614X, 978-0135176146
