Sophie received a 30 percent interest in a general partnership in exchange for property valued at $35,000 (adjusted basis = $25,000) and services valued at $5,000.In addition, the partnership assumed the $10,000 liability on the property.What is Sophie's basis in her partnership interest?
A)$20,000
B)$23,000
C)$25,000
D)$39,000

Question

Quizplus · Accepted Answer

Sophie's basis in the partnership interest is calculated as the adjusted basis of the property contributed ($25,000) plus the value of services provided ($5,000), minus the liability assumed by the partnership ($10,000). Therefore, $25,000 + $5,000 - $10,000 = $20,000.

Sophie Received a 30 Percent Interest in a General Partnership