Peter Mitchell has just become a partner of the Forefront Partnership. He has some vacant land that is in a perfect location for a building that the partnership wants to construct. As his initial ca...

Peter Mitchell has just become a partner of the Forefront Partnership. He has some vacant land that is in a perfect

location for a building that the partnership wants to construct. As his initial capital contribution, Peter transfers the land to

the partnership at its FMV of $720,000 The land cost him $154,000. On the transfer $130,000 as consideration received

back from the partnership. Pete wants to know the net tax consequences of this transaction?

Required: (fill-in-blanks)

i. Peter will have a taxable capital gain of?

ii. The adjusted cost base of Peter's partnership interest will be?

iii. The Forefront partnership will have acquired the land for?

Answer rating: 100% (QA)

i Peter will have a taxable capital gain of 566000 720000 154000 ii The a... View the full answer