Peter contributes property to a partnership in exchange for a 30% interest in the partnership. The contributed property consists of real estate he owns worth $500,000. Peter has an adjusted basis in the real estate of $200,000 and the real estate is subject to a mortgage of $300,000. What is Peterâs basis in his partnership interest, and how much gain or loss does he recognize?
a. negative basis of $10,000, and no gain is recognized.b. 0 basis and gain of $10,000 is recognized.c. 200,000 basis and no gain is recognized.d. 0 basis and a loss of $10,000 is recognized.
My answer is (c) 200,000 basis and no gain is recognized.(500,000-300,000)=200,000-200,000 adjusted basis is0 gain. Is this correct?
Peter contributes property to a partnership in exchange for a 30% interest in the partnership. The contributed property consists of real estate he owns worth $500,000. Peter has an adjusted basis in the real estate of $200,000 and the real estate is subject to a mortgage of $300,000. What is Peterâs basis in his partnership interest, and how much gain or loss does he recognize?
a. negative basis of $10,000, and no gain is recognized.b. 0 basis and gain of $10,000 is recognized.c. 200,000 basis and no gain is recognized.d. 0 basis and a loss of $10,000 is recognized.
My answer is (c) 200,000 basis and no gain is recognized.(500,000-300,000)=200,000-200,000 adjusted basis is0 gain. Is this correct?
Related questions
1. Karli owns a 25% capital and profitsinterest in the calendar-year KJDV Partnership. Her adjusted basisfor her partnership interest on July 1 of the current year is$200,000. On that date, she receives a proportionate nonliquidatingdistribution of the following assets:
Partnershipâs Basis in Asset | Assetâs Fair Market Value | |
Cash | $120,000 | $120,000 |
Inventory | 50,000 | 60,000 |
Land | 70,000 | 100,000 |
â
| a. Calculate Karliâs recognized gain or loss on the distribution, ifany. b. Calculate the partnership gain/loss from the distribution c. Calculate Karliâs basis in the inventory received d. Calculate Karliâs basis in land received. The land is a capitalasset e. Calculate Karliâs Outside basis in the partnership interest afterthe distribution |
Kase, an individual, purchased some property in Potomac,Maryland, for $242,000 approximately 10 years ago. Kase isapproached by a real estate agent representing a client who wouldlike to exchange a parcel of land in North Carolina for KaseâsMaryland property. Kase agrees to the exchange.
| What is Kaseâs realized gain or loss, recognized gain or loss,and basis in the North Carolina property in each of the followingalternative scenarios? (Loss amounts should be indicated bya minus sign.) â1) The transaction qualifies as a like-kindexchange and the fair market value of each property is $715,000.(Leave no answer blank. Enter zero ifapplicable.) a) Realized Gain?___ b) recognized gain 0 âc) Adjusted basis in new property?_____ â2) The transaction qualifies as a like-kind exchange and the fairmarket value of each property is $202,000. (Leave no answerblank. Enter zero if applicable.) a) Realized Gain?___ b) recognized gain 0 âc) Adjusted basis in new property?_____
|
