Hal, Steve, and Lew form a partnership to operate a grocery store. For each of the following
Question:
Hal, Steve, and Lew form a partnership to operate a grocery store. For each of the following contributions by the partners, indicate (1) the amount of income or gain recognized, if any, by the partner, and (2) the partner's basis in the partnership interest immediately after the contribution.
If an amount is zero, enter "0". Do not round your intermediate computations.
a. Hal contributes property with a basis of $45,000 and subject to a $75,000 liability to the partnership for a one-third partnership interest worth $105,000. The partnership assumes the liability.
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b. Steve contributes property with a basis of $25,000 and a fair market value of $105,000 to the partnership for a one-third partnership interest.
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Partially Correct
c. Lew performs services valued at $105,000 for the partnership for his one-third interest in the partnership.
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Fundamentals of Taxation 2018
ISBN: 9781259713736
11th Edition
Authors: Ana M. Cruz Dr., Michael Deschamps, Frederick Niswander, Debra Prendergast, Dan Schisler