Day 22

Question 1

What is the partners basis in the partnership?

Answer 1

Partnership interest equals the basis of the asset contributed PLUS the value of the partnership interest received for the services rendered

MCQ-06171

Question 2

How are Liabilities in excess of the adjusted basis of the property treated for the partner contributing it to the partnership?

Answer 2

Liabilities are treated as distribution. The adjusted basis less the liability, plus the partners portion of the liability assumed in the partnership and the excess amount to bring to zero = Capital gain recognized by the partner

NOTE: Cannot have negative basis

MCQ-01746

Question 3

When does the holding period begin for a partnership that received a Capital Asset in exchange for partnership interest?

Answer 3

Begins on the date of the partners holding period of the capital asset

Partnership assumes partner’s holding period

MCQ-01969

Question 4

What is the LLC’s basis in the property that was contributed with a liability?

Answer 4

The partnership assumes the Partner’s basis of the property

MCQ-07194

Question 5

How is contributed property with a built in gain allocated when sold?

Answer 5

The difference in the adjusted basis and FMV at the time of contribution is allocated to the contributing partner and the remaining gain is allocated evenly

MCQ-08206