Posted: December 19th, 2016

c) How could the transaction be structured a different way to get a better result for Sally?

4. Harry and Sally formed the Green Partnership by contributing the following assets in exchange for

a 50 percent capital and profits interest in the partnership:

Basis Fair Market Value

Harry:

Cash $ 30,000 $ 30,000

Land 100,000 120,000

Totals $ 230,000 $ 230,000

Sally:

Equipment used in a business 200,000 150,000

Totals $ 200,000 $ 150,000

1. a) How much gain or loss will Harry recognize on the contribution?
2. b) How much gain or loss will Sally recognize on the contribution?
3. c) How could the transaction be structured a different way to get a better result for Sally?
4. d) What is Harry’s tax basis in his partnership interest?
5. e) What is Sally’s tax basis in her partnership interest?
6. f) What is Green’s tax basis in its assets?