Dylan, Luke, and Hannah form a partnership.Dylan contributes land with a fair market value of $25,000 (basis of $15,000) in exchange for a 25% interest.Luke contributes equipment with a $35,000 fair market value (basis of $38,000) in exchange for a 35% interest, and Hannah contributes a building with a $100,000 fair market value (basis = $35,000) and a mortgage of $60,000 (assumed by the partnership) in exchange for a 40% interest.What is the partnership's basis in the building it received from Hannah?
A)$35,000
B)$60,000
C)$65,000
D)$100,000

Question

Quizplus · Accepted Answer

The partnership's basis in the building is the same as Hannah's adjusted basis in the building, which is $35,000. This is because the partnership takes a carryover basis in the property contributed by a partner.

Dylan, Luke, and Hannah Form a Partnership