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# LSK Ch. 2 Problem 2

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## 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:
704(c) Gain = \$300
Partner E
Economics:
Building w/ FMV = \$260
Mortgage = \$60
Net Value Contributed = \$200

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

Tax Attributes:
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