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In-s [12.5K]
4 years ago
14

Meredith and Katie form an equal partnership during the current year. Meredith contributes cash of $160,000, and Katie contribut

es property (adjusted basis of $90,000, fair market value of $260,000) subject to a nonrecourse liability of $100,000. As a result of these transactions, Katie has a basis in her partnership interest of $40,000.
True
False
Business
1 answer:
astraxan [27]4 years ago
7 0

Answer:

False

Explanation:

Katie's S704(c) allocation = $90,000 (basis of the transferred property) - $100,000 (debt) = $10,000

The remaining debt of the partnership = $100,000 - $10,000 = $90,000

Katie's basis in the partnership = 50% x remaining debt = 50% x $90,000 = $45,000

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