Carol contributed $30,000 cash, and land with a fair market value of $60,000 and an adjusted basis of $40,000. Connie contributed equipment with a fair market value of $90,000 and an adjusted basis of $30,000. Connie previously had used the equipment in a sole proprietorship. As to the partnership formation:

a. How much gain or loss will Carol, Connie, and the partnership realize?

b. How much gain or loss will Carol, Connie, and the partnership recognize?

c. What bases will Carol and Connie take in their partnership interests?

d. What bases will CC take in the assets it receives?

e. Are there any differences between inside and outside basis at this point?

f. How will the partnership depreciate any assets it receives from the partners?
DECISION MAKING COMMUNICATIONS