Randy and Sherry form a general partnership-The Manhattan Partnership-as equal partners. Randy contributes an office building with a $117,000 FMV and a $85,500 adjusted basis to the partnership, along with a $54,000 mortgage which the partnership assumes. Sherry contributes the land on which the building sits with a $45,000 FMV and a $67,500 adjusted basis. Sherry will manage the partnership for the first 5 years of operations but will not receive a guaranteed payment for her work in the first  year of partnership operations. Starting with the second year of partnership operations, Sherry will receive a $10,000 guaranteed payment for each year she manages the partnership. What tax issues should Randy,

Sherry, and the Randy consider with respect to the formation and operation of the partnership?

Answer rating: 100% (QA)

Answer There is an additional tax issue which must be addressed Randy contributed property with a ne... View the full answer