This year, individual Kale and individual Spinach formed Leafy Green Partnership. Kale contributed $61,750 cash, and Spinach contributed business assets with a $61,750 FMV. Spinach's adjusted basis in these assets was only $12,350. The partnership agreement provides that income and loss will be divided equally between the two partners. Partnership operations for the year generated a $45,600 loss. Required: How much loss may each partner deduct currently, and what basis will each partner have in her interest at the beginning of next year? Determine the loss each partner can deduct currently considering the basis loss limitation, but no other loss limitations. (Losses and deductions should be entered as negative numbers.) Partner Partner Kale Spinach Initial basis in partnership interest $ 61,750 $ 12,350 Deduction for share of partnership loss Adjusted basis at beginning of next year $ 61,750 $ 12,350
This year, individual Kale and individual Spinach formed Leafy Green Partnership. Kale contributed $61,750 cash, and Spinach contributed business assets with a $61,750 FMV. Spinach's adjusted basis in these assets was only $12,350. The partnership agreement provides that income and loss will be divided equally between the two partners. Partnership operations for the year generated a $45,600 loss. Required: How much loss may each partner deduct currently, and what basis will each partner have in her interest at the beginning of next year? Determine the loss each partner can deduct currently considering the basis loss limitation, but no other loss limitations. (Losses and deductions should be entered as negative numbers.) Partner Partner Kale Spinach Initial basis in partnership interest $ 61,750 $ 12,350 Deduction for share of partnership loss Adjusted basis at beginning of next year $ 61,750 $ 12,350
Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations
Section: Chapter Questions
Problem 15CE
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Transcribed Image Text:This year, individual Kale and individual Spinach formed Leafy Green Partnership.
Kale contributed $61,750 cash, and Spinach contributed business assets with a
$61,750 FMV. Spinach's adjusted basis in these assets was only $12,350. The
partnership agreement provides that income and loss will be divided equally
between the two partners. Partnership operations for the year generated a
$45,600 loss.
Required:
How much loss may each partner deduct currently, and what basis will each
partner have in her interest at the beginning of next year? Determine the loss each
partner can deduct currently considering the basis loss limitation, but no other loss
limitations. (Losses and deductions should be entered as negative numbers.)
Partner
Kale
Partner
Spinach
Initial basis in partnership interest
$ 61,750 $ 12,350
Deduction for share of partnership loss
Adjusted basis at beginning of next year
$ 61,750
$ 12,350
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