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LSK Ch. 2 Problem 2

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by

Cass Brewer

on 18 August 2014

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Transcript of LSK Ch. 2 Problem 2

LSK Chapter 2 Problem 2
Partner D
Economics:
Land w/ FMV = $400
Cash = $40
Mortgage = $240
Net Value Contributed = $200

Tax Attributes:
Adjusted Basis = $100
704(c) Gain = $300
Partner E
Economics:
Building w/ FMV = $260
Mortgage = $60
Net Value Contributed = $200

Tax Attributes:
Adjusted Basis = $130
704(c) Gain = $130
Partner F
Economics:
Accts Receivable FMV = $350
Liabilities = $0
Accts Payable = $150
Net Value Contributed = $200

Tax Attributes:
Adjusted Basis = $0
IRC Sec. 704(c)(3) Property
The Way Out:
Sections 721, 722, & 752
+ AB Contributed Property = _____
-- Liability Relief = (_____)
+ Partner's Share of Liability = _____
= AB in Partnership Interest = _____
If AB is $0 or above, no gain.
If AB is
negative
, gain recognized to that extent.
Partner D
+ AB Prop Contributed = $100
+ AB Prop Contributed = $40
-- Liability Relief = ($240)
+ 752 Share of Liability = $80
+ 752 Share of Liability = $20
TOTAL = $0
Partner E
+ AB Prop Contributed = $130
-- Liability Relief = ($60)
+ 752 Share of Liability = $80
+ 752 Share of Liability = $20
TOTAL = $170
Partner F
+ AB Prop Contributed = $0
-- Liability Relief = ($0)
+ 752 Share of Liability = $80
+ 752 Share of Liability = $20
TOTAL = $100
The Way Out
IRC Sections 721, 722, & 752
Full transcript