Zinc, LP was formed on August 1, 20X9. When the partnership was formed, Al contributed $10,000 in cash and inventory with a FMV and tax basis of $40,000. In addition, Bill contributed equipment with a FMV of $30,000 and adjusted basis of $25,000 along with accounts receivable with a FMV and tax basis of $20,000. Also, Chad contributed land with a FMV of $50,000 and tax basis of $35,000. Finally, Dave contributed a machine, secured by $35,000 of debt, with a FMV of $15,000 and a tax basis of $10,000. What is the total inside basis of all the assets contributed to Zinc, LP?
A) $140,000.
B) $165,000.
C) $175,000.
D) $200,000.

Question

Quizplus · Accepted Answer

The partnership's total inside basis is equivalent to the partners' tax basis in all the assets they contributed. $140,000 ($10,000 + $40,000 + $25,000 + $20,000 + $35,000 + $10,000).

Zinc, LP Was Formed on August 1, 20X9