Partnership Basis

Question 1

Partnership Basis Formula

Answer 1

Cash Contributed
+AB of Property Contributed
+Any Gain Recognized on Contributed Property or Services
+Share of Partnership Liabilities Assumed
-Partner’s Liability Assumed by Partnership
=Basis in Partnership Interest

Question 2

When will liabilities result in the partner recognizing gain on contribution?

Answer 2

When liability of partner assumed by partnership exceeds adjusted basis of contributed property.

Question 3

Partner’s HP in partnership interest?

Answer 3

Tacked if Partner contributes capital or 1231 property.

Question 4

Partnership HP in contributed property?

Answer 4

Tacked regardless of type of property

Question 5

T/F A partner who receives a capital interest in exchange for services recognizes gross income for FMV of partnership interest?

Answer 5

T

Question 6

What conditions or lack thereof qualify a capital interest received for services to be treated as gross income?

Answer 6

The interest is subject to neither substantial risk of forfeiture nor restrictions on transfer.

Question 7

T/F A partner who receives a profits interest in exchange for services recognizes gross income for FMV of partnership interest?

Answer 7

F. Gross income recognized as profits come in

Question 8

What is the basis of a partner’s interest in a partnership if that interest is purchased from another partner?

Answer 8

The cost, which is the purchase price plus liabilities assumed.