Which of the following statements is True when property is contributed in exchange for a partnership interest?
A) Any contributed property in a partnership has a carryover basis, and the character of the property is determined by the way the contributing partner used the property.
B) The partnership's inside basis is typically increased by any gain the partner recognizes from the property contribution.
C) The holding period for a partner's partnership interest depends upon the type of assets a partner contributes.
D) Services are not allowed to be contributed to a partnership in return for a partnership interest.
E) All of the choices are True.

Question

Quizplus · Accepted Answer

Any contributed property in a partnership initially has a carryover basis, but the character of the contributed property is assessed at the partnership level. The partnership's inside basis in contributed property usually does not reflect any gain recognized by contributing partners. The holding period for a partner's partnership interest depends upon the type of assets a partner contributes correctly states the rule for determining the holding period of a partnership interest. Specifically, a partner's holding period tacks only if the partner contributes Section 1221 or 1231 property. Otherwise, the partner's holding period begins on the date of contribution. Lastly, services are allowed to be contributed for a partnership interest.

Which of the Following Statements Is True When Property Is