Check my work Liz and John formed the equal LJ Partnership on January 1 of the current year. Liz contributed $80,000 of cash and land with a fair market value of $90,000 and an adjusted basis of $75,000. John contributed equipment with a fair market value of $170,000 and an adjusted basis of $20,000. John previously used the equipment in his sole proprietorship. How much gain or loss will Liz, John, and LJ realize? Liz – FMV-Basis= 90,000-75,000= $15,000 realized gain John – FMV – Basis = 170,000-20,000= $150,000 realized gain LJ Partnership is value of property received. Cash+land+equip-adj values for all= 80,000+90,000+170,000-80,000-75,000-20,000=$165,000 realized gain - How much gain or loss will Liz, John, and LJ recognize?
Check my work
Liz and John formed the equal LJ
How much gain or loss will Liz, John, and LJ realize?
Liz – FMV-Basis= 90,000-75,000= $15,000 realized gain
John – FMV – Basis = 170,000-20,000= $150,000 realized gain LJ Partnership is value of property received. Cash+land+equip-adj values for all= 80,000+90,000+170,000-80,000-75,000-20,000=$165,000 realized gain -
How much gain or loss will Liz, John, and LJ recognize?
The formation of a partnership is not a taxable event, so there is not a recognized gain or loss at the time of formation, but instead takes carryover basis in the assets it receives. Recognized gain for all is $0.0
No gain or loss should be recognized to the partnership or any partners for the contribution of the property at the time of formation.
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