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hjlf
3 years ago
10

AB Corporation and YZ Corporation formed a partnership to construct a shopping mall. AB contributed $527,000 cash, and YZ contri

buted land ($527,000 FMV and $457,000 basis) in exchange for a 50 percent interest in ABYZ Partnership. Immediately after its formation, ABYZ borrowed $263,500 from a local bank. The debt is recourse (unsecured by any specific partnership asset). Compute each partner's initial basis in its partnership interest, assuming that:
a. AB and YX are both general partners.
b. AB is a general partner, and YZ is a limited partner.
Business
1 answer:
Vaselesa [24]3 years ago
5 0

Answer:

a. AB and YX are both general partners.

AB's basis in the partnership's interests = $527,000 + ($263,500/2) = $658,750

YZ's basis in the partnership's interests = $457,000 + ($263,500/2) = $588,750

Each partner share 50% interest in the recourse debt.

b. AB is a general partner, and YZ is a limited partner.

AB's basis in the partnership's interests = $527,000 + $263,500 = $790,500

YZ's basis in the partnership's interests = $457,000

Only AB has a share in the recourse debt, since YZ is a limited partner  it has no recourse debt share.

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This is an example of technology spillover and positive externalities.

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When another company encourages to formulate technology with more lasting power, it creates a benefit for the other people as well as the technology spillover.

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Business analysis.

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Why is Eagle Bank's 1-year CD the only account
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Eagle Bank's 1-year CD became the only account guaranteed to return $22 in interest on a $1,000 deposit because a typical CD earns about 1.5% or less instead of 2.2%.

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A certificate of deposit (CD) is a special bank savings account that earns interest on a lump-sum deposit for a predetermined period of time without withdrawals until the due period.

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1 year ago
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