Question

Emma and Laine form the equal EL Partnership. Emma contributes cash of $100,000. Laine contributes property with an adjusted basis of $40,000 and a fair market value of $100,000.a. How much gain, if any, must Emma recognize on the transfer? Must Laine recognize any gain? If so, how much?b. What is Emma's basis in her partnership interest?c. What is Laine's basis in her partnership interest?d. What basis does the partnership take in the property transferred by Laine?

Answer 1

Emma and Laine form the equal EL Partnership. Emma contributes cash of $100,000. Laine contributes property with an adjusted basis of $40,000 and a fair market value of $100,000

Explanation:

As given in the question

• Emma and Laine form the equal EL Partnership.
• Emma contributes cash of $100,000 in EL Partnership
• Laine contributes property with an adjusted basis of $40,000

1)How much gain, if any, must Emma recognize on the transfer

Ans: Neither Emma nor Laine ,none of them recognize any gain.

2) What is Emma's basis in her partnership interest

Ans:Emma basis in her patnership interest is $100,000

3) What is Laine's basis in her partnership interest

Ans: Laine's basis in her partnership interest is $40000

4) What basis does the partnership take in the property transferred by Laine

Ans: $40,000