Jamie decides to contribute cash and property to a partnership she and her friends started. She contributes a building worth $260,000 that has an adjusted basis of $100,000 and she also contributes $40,000 in cash. What is her basis in the partnership?

Question

Quizplus · Accepted Answer

Jamie's basis in the partnership would be the sum of the value of the property and cash contributed, which is $300,000. However, when contributing property to a partnership, the basis is generally the adjusted basis of the property, which in this case is $100,000. Therefore, Jamie's basis in the partnership is $100,000 (adjusted basis of the building) + $40,000 (cash contribution) = $140,000.

Jamie Decides to Contribute Cash and Property to a Partnership