will be equivalent throughout the life of the partnership; discrepancies arise from the sale of assets Partner Inside Basis Inside H.P. A $300 None B $100 2 years C $400 6 months Total $800 Step 4: Determine Holding Periods Outside: §1223(1). In determining period for which tp held property received in an exchange, there shall be included the period he held property exchanged if property has, for purpose of determining gain or loss from a sale 7
2-2. Same as 1, except two years after formation of P, D acquires P interest in exchange for contributing a parcel of land that adjoins P’s original property. D purchased this parcel for $200K it is worth $400K at contribution. At that time, the partnership’s original land has appreciated to $500K, C’s stock contribution has recovered its $400K value and the partnership continues to hold $300K in cash.Partner Asset Basis FMV InitiallyFMV @ D EntryACash 300300300BLand 1100300500CStock 400300400DLand 2200-0-400(a) What is D’s percentage interest in the partnership? (b) What is the gain or loss that D will recognize as a result of her contribution?Under §721(a) D will not recognize any gain on contribution to the partnership. book capital jumps up to $400 (c) What gain or loss is recognized by the partners on D’s contribution ?
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