Question

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

Answer 1

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.

Step-by-step 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