1. A and B form the equal AB partnership. A contributes property (FMV = $100,000, basis = $60,000) and B contributes $100,000 cash. The property is depreciated straight line over a 10 year life for both book and tax purposes. Using the traditional method under Code Sec. 704(c), how much of the tax depreciation in the first year will A get? How much will B be allocated? How much of the gain would be allocated to A if the asset is sold for $110,000 at the beginning of year 2?
1. A and B form the equal AB partnership. A contributes property (FMV = $100,000, basis = $60,000) and B contributes $100,000 cash. The property is depreciated straight line over a 10 year life for both book and tax purposes. Using the traditional method under Code Sec. 704(c), how much of the tax depreciation in the first year will A get? How much will B be allocated? How much of the gain would be allocated to A if the asset is sold for $110,000 at the beginning of year 2?
Chapter21: Partnerships
Section: Chapter Questions
Problem 28P
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1. A and B form the equal AB
$100,000, basis = $60,000) and B contributes $100,000 cash. The property is
depreciated straight line over a 10 year life for both book and tax purposes. Using the
traditional method under Code Sec. 704(c), how much of the tax
first year will A get? How much will B be allocated? How much of the gain would
be allocated to A if the asset is sold for $110,000 at the beginning of year 2?
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