Question

In 2015, Ryce contributes nondepreciable property with an adjusted basis of $60,000 and a fair market value of $95,000 to the Montgomery Partnership in exchange for a one-half interest in profits and capital. In 2016, when the property’s fair market value is $100,000, the partnership distributes the property to Jarvis, the other one-half partner.
Which partner must recognize the built-in gain and what is the amount recognized? What is the effect on that partner’s basis in the partnership interest?


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  • CreatedSeptember 09, 2015
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