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?
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 Cash+land+equip-adj values for all= 80,000+90,000+170,000-80,000-75,000-20,000=$165,000 realized gain
Given information is:
Contribution of Liz:
Cash = $80,000
FMV of Equipment = $90,000
Adjusted basis = $75000
Contribution of John:
FMV of Equipment = $170,000
Adjusted basis = $20,000
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
