YEAR ONE
FACTS:
				Ownership Percentage
Partner	Asset	FMV	Basis
A	Cash	$ 400,000	$ 400,000	50%
B	Land	$ 400,000	$ 230,000	50%
		$ 800,000	$ 630,000	100%
Partnership Operations Year One
Assume net income is kept in the partnership to fund operations
Ordinary Income	$ 648,000
Tax Exempt Income	$ 2,200
Charitable Contributions	$ (13,800)
Capital Loss	$ (3,300)
	$ 633,100

1.) Prepare the BEGINNING of year INSIDE (TAX) BASIS balance sheet for the PARTNERSHIP for YEAR ONE.
2.) Prepare the END of year INSIDE (TAX) BASIS balance sheet for the PARTNERSHIP for YEAR ONE.
3.) Prepare the BEGINNING of year FINANCIAL STATEMENT (BOOK) BASIS balance sheet for the PARTNERSHIP for YEAR ONE.
4.) Prepare the END of year FINANCIAL STATEMENT (BOOK) BASIS balance sheet for the PARTNERSHIP for YEAR ONE.
5.) Calculate the OUTSIDE TAX BASIS for YEAR ONE for PARTNERS A & B.
6.) Calculate PARTNER B's pre-contribution gain in YEAR ONE (if any).