Question: Mary and Todd form the MT Partnership with a transfer of the following properties: Mary $500,000 cash Todd $500,000 FMV property $300,000 tax basis Both

Mary and Todd form the MT

Partnership with a transfer of the following properties:

Mary

$500,000 cash

Todd

$500,000 FMV property

$300,000 tax basis

Both Mary and Todd receive a 50% interest in the corporate stock.

Complete the following

Mary Todd

Realized gain

________

________

Recognized gain

________

_________

Basis of Stock

_________

_________

MT basis in contributed asset

__________

_________

VARIATION 1: In addition to Mary and Todd, Karla joins the partnership at its inception. Karla will

provide services to the corporation in exchange for a 25% interest in the stock. That is, she receives 25%

of the outstanding shares. Does anything change? Why or why not?

VARIATION 2: return to original facts (no Karla). Todd's property is valued at $700,000 but is

contributed subject to a $200,000 liability.

Complete the following

Mary Todd

Realized gain

________

________

Recognized gain

________

_________

Basis of stock

_________

_________

MT basis in contributed asset

__________

_________

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