In 2016, Ryce contributes non-depreciable property with an adjusted basis of $60,000 and a fair market value

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In 2016, Ryce contributes non-depreciable 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 2017, 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 a gain and what is the amount recognized? What is the effect on that partner's basis in the partnership interest?
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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South Western Federal Taxation 2017 Corporations, Partnerships, Estates And Trusts

ISBN: 9781305874336

40th Edition

Authors: William H. Hoffman, William A. Raabe, David M. Maloney, James C. Young

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