Assume a new partner or shareholder owns land valued at $180,000 in which the tax basis is $120,000. How would the “incidence of taxation” differ for the entities and owners if

(1) The owner (partner or shareholder) sold the property and contributed the $180,000 proceeds or if

(2) The owner (partner or shareholder) contributed that same property with the entity selling it for $180,000? What theory of partnership taxation supports this difference in treatment? Further, discuss what ethical issues are present in the scenario, and provide a Biblical perspective to frame these issues.

Answer rating: 100% (QA)

1 Basis 120000 Contribution 180000 Contribution is greater than basis so remaining 60000 will be taxable in account of That partner 2 If the Entity selling that property then whole amount of 180000 wi... View the full answer