A and B form the equal AB partnership. A contributes property (FMV = $120,000, basis = $50,000) and B contributes $120,000 cash. The property is depreciated straight line over a 10 year life for both book and tax purposes. The partnership also has other property (FMV = $200,000, basis = $200,000) that is depreciated straight line over 10 years. Under Code Sec. 704(c), how much of the tax depreciation of the contributed property in the first year will B get? Assuming a curative allocation is made, how much will it be? If there were no other depreciable assets, what type of curative allocation could be made?

Answer rating: 100% (QA)

A and B have a ratio of 11 Property 1200001... View the full answer