Ethan Allen is one of three partners in the Colonial Partnership (CP). During 2020, Ethan transfers land to the partnership. The partners agree that the land has a fair market value of $220,000. Ethan's adjusted cost base for the land is $100,000. Describe the tax consequences to Ethan and CP in the following three situations:
A. No consideration is received from CP.
B. Ethan receives $60,000 in cash from CP on the transfer.
C. Ethan receives $250,000 in cash from CP on the transfer.

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The Answer of Ethan Allen is one of three partners in the Colonial Partnership (CP). During 2020, Ethan transfers land to the partnership. The partners agree that the land has a fair market value of $220,000. Ethan's adjusted cost base for the land is $100,000. Describe the tax consequences to Ethan and CP in the following three situations:
A. No consideration is received from CP.
B. Ethan receives $60,000 in cash from CP on the transfer.
C. Ethan receives $250,000 in cash from CP on the transfer.

Ethan Allen Is One of Three Partners in the Colonial