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Allisa [31]
3 years ago
15

On January 1 of the current year, Anna and Jason form an equal partnership. Anna contributes $50,000 cash and a parcel of land (

adjusted basis of $100,000; fair market value of $150,000) in exchange for her interest in the partnership. Jason contributes property (adjusted basis of $180,000; fair market value of $200,000) in exchange for his partnership interest. Which of the following statements is true concerning the income tax results of this partnership formation?
(a) Jason recognizes a $20,000 gain on his property transfer.
(b) Jason has a $200,000 tax basis for his partnership interest.
(c) Anna has a $150,000 tax basis for her partnership interest.
(d) The partnership has a $150,000 adjusted basis in the land contributed by Anna.
Business
1 answer:
VLD [36.1K]3 years ago
6 0

Answer:

Option (C) is correct.

Explanation:

Given that,

Anna contributes = $50,000 of cash

Parcel of land:

Adjusted basis = $100,000

Fair market value = $150,000

The contributions are free from taxes and carryover basis is applicable; thus 100,000 basis in the land plus 50,000 cash basis.

Therefore,

Anna's tax basis for her partnership interest :

= Adjusted basis + Cash contribution

= $100,000 + $50,000

= $150,000

Hence, Anna has a $150,000 tax basis for her partnership interest.

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7 0
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The rate of return on the common stock of Lancaster Woolens is expected to be 21 percent in a boom economy, 11 percent in a norm
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Answer:

0.002244

Explanation:

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Blossom, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $4,700 from sales $201
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Answer:

Analysis of the Big Bart line discontinuity

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