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T11F-Chp-13-3-Class Exercise on Cont to Ptshp

# T11F-Chp-13-3-Class Exercise on Cont to Ptshp - 1 Version...

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1. Version 1-Prob 1df96502355cb202669fe4c369a331743b08645d.xls Page 1 of 4 Transfer of Assets to Partnership - Version 2 - Problem Betty contributed land (which has a mortgage) for an interest in a new partnership. She received in return an interest in capital and profits of: 40% FMV of the land contributed by Betty to the partnership was: \$10,000 Betty's basis in the land contributed to the partnership was: \$6,000 The partnership assumed Betty's mortgage debt of: \$9,000 Debt the partnership will have, in addition to debt on line above \$0 What is the amount of Betty's recognized gain? What is Betty’s basis in her partnership interest? What is the partnership’s recognized gain? What is the partnership’s basis in the land? Page Betty contributes land to partnership Background Information and Analysis 1 Betty's land (that she invested) has a value of \$10,000 2 Betty's land (that she invested) had a basis to her of 6,000 3 Partnership capital % received by Betty 40% 4 Partnership capital % owned by other partners 60% 5 Partnership debt before Betty's investment 0 6 Partnership debt assumed by Betty 0 7 Betty's debt assumed by Partnership 9,000 8 Betty's debt assumed by other Partners 5,400 Compute Betty's Gain 10 Betty's basis in land before contribution to the partnership 11 Add: Partnership debt assumed by Betty 12 Less: Betty's debt assumed by other Partners 13 Betty has gain if this amount is negative 14 If line 13 amount is negative, Betty recognizes that amount Compute Betty's Basis in Partnership. 15 Betty's basis in asset contributed 16 Add: Partnership debt assumed by Betty 17 Less: Betty's debt assumed by other Partners 18 Betty's Basis in Partnership. Cannot be negative Compute Partnership's Basis in Land 19 Betty's land basis (before contribution) 20 Add: gain - invesment company (rare) XXX 21 Do not add gain for excess debt assumed by partnership XXX 22 Partnership's basis in land invested

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T11F-Chp-13-3-Class Exercise on Cont to Ptshp - 1 Version...

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