In the current year, Dana transfers to the DE Partnership land and a building having a total $25,000 adjusted basis and an $80,000 FMV. In addition, the property is subject to a $70,000 mortgage. The land and the building cost $105,000 when Dana acquired them in 1988, and Dana has claimed $80,000 of straight-line depreciation on the building. The land and building originally cost $20,000 and $85,000, respectively. Dana, who is active in the management of the partnership, receives a one-half interest in the partnership. Assume the partners’ economic risk of loss is equal to their interest in the partnership.
a. What are the amount and character of Dana’s recognized gain or loss on the transfer?
b. What is Dana’s basis in her partnership interest?
c. When does Dana’s holding period for the partnership interest begin?
d. What is the basis of the contributed properties to the DE Partnership?