Check my work. Lee, Brad, and Rick form the LBR Partnership on January 1 of the current year. In return for a 25% interest, Lee transfers property (basis of $15,000, fair market value of $17,500) subject to a nonrecourse liability of $10,000. The liability is assumed by the partnership. Brad transfers property (basis of $16,000, fair market value of $7,500) for a 25% interest, and Rick transfers cash of $15,000 for the remaining 50% interest. How much loss may Brad recognize on the transfer? 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 loss is $0.0 What is Brad’s basis in his interest in the partnership? Basis + liability assumed = $16,000+10,000*25% = $16,000+$2,500= $18,500 What is Rick’s basis in his interest in the partnership? Basis + liability assumed = $15,000+$10,000*50%= $15,000+$5,000=$20,000
Check my work.
Lee, Brad, and Rick form the LBR
How much loss may Brad recognize on the transfer?
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 loss is $0.0
What is Brad’s basis in his interest in the partnership?
Basis + liability assumed = $16,000+10,000*25% = $16,000+$2,500= $18,500
What is Rick’s basis in his interest in the partnership?
Basis + liability assumed = $15,000+$10,000*50%= $15,000+$5,000=$20,000
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
