When Kevin and Marshall formed the equal KM LLC, the fair market values of their interests were each $100,000.
Kevin contributed $60,000 cash, equipment with a basis of $0 and a fair market value of $10,000, and a small parcel of land in which he had a basis of $50,000 and that was valued at $30,000. Marshall contributed receivable that was valued at $100,000 and in which his basis was $0. Kevin has a basis in his partnership interest of $110,000 and Marshall's basis is $0.

Question

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Kevin's basis in his partnership interest is $110,000, which is equal to the fair market value of his contribution ($60,000 cash + $10,000 equipment + $30,000 land) plus his share of the partnership's liabilities ($0). Marshall's basis in his partnership interest is $0, which is equal to the fair market value of his contribution ($100,000 receivable) minus his share of the partnership's liabilities ($0).

When Kevin and Marshall Formed the Equal KM LLC, the Fair