Natasha and Felicia are equal partners in the Natty Partnership. On April 30, 2020, Natasha and Felicia's partnership capital account balances are $148,800 each. This amount is also equal to the adjusted cost base of their partnership interests. Kyra is admitted as an equal partner on April 30, 2020, and pays $124,000 to each of Natasha and Felicia. Calculate the tax effects of the partner admission for Natasha and Felicia and determine the capital account balances and adjusted cost base for each partner after the admission of Kyra.

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The Answer of Natasha and Felicia are equal partners in the Natty Partnership. On April 30, 2020, Natasha and Felicia's partnership capital account balances are $148,800 each. This amount is also equal to the adjusted cost base of their partnership interests. Kyra is admitted as an equal partner on April 30, 2020, and pays $124,000 to each of Natasha and Felicia. Calculate the tax effects of the partner admission for Natasha and Felicia and determine the capital account balances and adjusted cost base for each partner after the admission of Kyra.

Natasha and Felicia Are Equal Partners in the Natty Partnership