Question

Liz and John formed the equal LJ Partnership on January 1 of the current year.
Liz contributed $80,000 of cash and land with a fair market value of $90,000 and an adjusted basis of $75,000. John contributed equipment with a fair market value of $170,000 and an adjusted basis of $20,000. John previously used the equipment in his sole proprietorship.
a. How much gain or loss will Liz, John, and LJ realize?
b. How much gain or loss will Liz, John, and LJ recognize?
c. What bases will Liz and John take in their partnership interests?
d. What bases will LJ take in the assets it receives?
e. How will LJ depreciate any assets it receives from the partners?


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  • CreatedMay 25, 2015
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