1. Jay contributes a property with a fair market value of $16,000 and an adjusted basis of $5,000 to a partnership in exchange for an 8 percent partnership interest.

a. Calculate the amount of gain recognized by Jay as a result of the transfer of ownership to the partnership.

b. Calculate Jay's basis in his partnership interest immediately after the partnership contribution.

2. Wilson has a 40 percent interest in the assets and income of the CC&W Partnership, and the basis of his interest in the partnership is $45,000 at the beginning of 2016. During 2016, the partnership's net loss is $60,000 and Wilson's share of the loss is $24,000. In addition, Wilson receives a cash distribution from the partnership of $12,000 on June 30, 2016.

a. Enter the amount of partnership income or loss Wilson must report on his 2016 individual income tax return.

b. Calculate Wilson's basis on his share of the partnership at the end of 2016.

3. Louise owns 45 percent of a partnership and her brother owns the remaining 55 percent. During the current fiscal year, Louise sold a building to the partnership for $160,000 to be used as the partnership's office. She had owned the building for 3 years and had an adjusted basis of $120,000 at the time of the sale.

a.  What is the amount and nature of Louise's gain in this transaction?

Answer rating: 100% (QA)

1 The gain recognized is the difference between the FMV and the adjusted basis In this case FMV of t... View the full answer