Martha Stuart is one of four partners in the Homemaker Partnership (HP). During the current year, Martha contributes a tract of land to the partnership. Martha acquired the land for $59,400 and, at the time of transfer, it is valued at $180,000. Martha does not use a rollover provision to make the transfer. Describe the tax consequences to Martha and HP in the following three situations:
A. No consideration is received from HP.
B. Martha receives $45,000 in cash from HP on the transfer.
C. Martha receives $201,600 in cash from HP on the transfer.

Question

Quizplus · Accepted Answer

The Answer of Martha Stuart is one of four partners in the Homemaker Partnership (HP). During the current year, Martha contributes a tract of land to the partnership. Martha acquired the land for $59,400 and, at the time of transfer, it is valued at $180,000. Martha does not use a rollover provision to make the transfer. Describe the tax consequences to Martha and HP in the following three situations:
A. No consideration is received from HP.
B. Martha receives $45,000 in cash from HP on the transfer.
C. Martha receives $201,600 in cash from HP on the transfer.

Martha Stuart Is One of Four Partners in the Homemaker