Posted: December 19th, 2016
c) How could the transaction be structured a different way to get a better result for Sally?
- Harry and Sally formed the Green Partnership by contributing the following assets in exchange for
a 50 percent capital and profits interest in the partnership:
Basis Fair Market Value
Harry:
Cash $ 30,000 $ 30,000
Land 100,000 120,000
Totals $ 230,000 $ 230,000
Sally:
Equipment used in a business 200,000 150,000
Totals $ 200,000 $ 150,000
- a) How much gain or loss will Harry recognize on the contribution?
- b) How much gain or loss will Sally recognize on the contribution?
- c) How could the transaction be structured a different way to get a better result for Sally?
- d) What is Harry’s tax basis in his partnership interest?
- e) What is Sally’s tax basis in her partnership interest?
- f) What is Green’s tax basis in its assets?