Answered

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17. Sue and Andrew form SA general partnership. Each person receives an equal interest in the newly created partnership. Sue contributes $29,000 of cash and land with an FMV of $74,000. Her basis in the land is $39,000. Andrew contributes equipment with an FMV of $31,000 and a building with an FMV of $52,000. His basis in the equipment is $27,000, and his basis in the building is $39,000. How much gain must the SA general partnership recognize on the transfer of these assets from Sue and Andrew

Sagot :

anthougo

Answer:

SA General Partnership

The amount of gain that SA General Partnership must recognize on the transfer of these assets from Sue and Andrew is:

= $52,000.

Explanation:

a) Data and Calculations:

Contributions by partners

                                  Sue       Andrew       Partner's    Partnership

                                 FMV         FMV             Basis       Gain/(Loss)

Cash                     $29,000                       $29,000

Property:

Land                        74,000                         39,000        $35,000

Equipment                                31,000        27,000            4,000

Building                                   52,000        39,000           13,000

Total property     $74,000    $83,000    $134,000       $52,000

Partner's' basis $103,000    $83,000    $134,000       $52,000

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