Lanny is an owner of the Chasteen Partnership. He sells land to the partnership for $40,000 for

Question:

Lanny is an owner of the Chasteen Partnership. He sells land to the partnership for $40,000 for which he had paid $52,000. Discuss the treatment of the sale under the following assumptions:

a. Lanny owns a 30% interest in the partnership.

b. Lanny owns a 60% interest in the partnership.

c. Assume the same facts as in part b. Several years later, Chasteen sells the land for $60,000. What is Chasteen’s recognized gain on the sale?

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...