Sue and Andrew form SA general partnership. Each person receives an equal interest in the newly created partnership. Sue contributes $19,000 of cash and land with a FMV of $64,000. Her basis in the land is $29,000. Andrew contributes equipment with a FMV of $21,000 and a building with a FMV of $42,000. His basis in the equipment is $17,000, and his basis in the building is $29,000. How much gain must the SA general partnership recognize on the transfer of these assets from Sue and Andrew?

A. $0

B. $4,000

C. $48,000

D. $52,000

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Business

Rhett Wood

Today, 04:06

Sue and Andrew form SA general partnership. Each person receives an equal interest in the newly created partnership. Sue contributes $19,000 of cash and land with a FMV of $64,000. Her basis in the land is $29,000. Andrew contributes equipment with a FMV of $21,000 and a building with a FMV of $42,000. His basis in the equipment is $17,000, and his basis in the building is $29,000. How much gain must the SA general partnership recognize on the transfer of these assets from Sue and Andrew?

A. $0

B. $4,000

C. $48,000

D. $52,000

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Answers (1)

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Brenton Cantu · Answer 1

Answer: $0

Explanation: From the given information, here the SA general partnership will acknowledge $0 increase on the conveyance of these assets, this will be so since the increase is reported at the time of disposal of the asset instead at transfer of the assets. The following dealing will result in a carryover basis.

This basis takes spot under a property transfer, this also events in a transfer of the individual's foundation in the property. Thus it is carried over from one individual to another.