Caroline,Jessica,and Samantha form a partnership.Caroline contributes a building,Jessica contributes cash and Samantha will operate the business. $\begin{array}{llll}&FMV&\text { Basis }&\text { Partnership }\%\
\text { Caroline's Building } & \$ 400,000 & \$ 100,000 & 20 \%\
\text { Jessica's Cash } & \$ 400,000 & \$ 400,000 & 20\%\
\text { Samantha's Services }&\$0&\$0&60\%
\end{array}$ How much income must Samantha recognize?

Question

Quizplus · Accepted Answer

Samantha must recognize income equal to the fair market value of the partnership interest received for her services, which is 60% of the total partnership value. The total value is $800,000 ($400,000 from Caroline and $400,000 from Jessica), so 60% of $800,000 is $480,000.

Caroline,Jessica,and Samantha Form a Partnership How Much Income Must Samantha Recognize? A)$0

Caroline,Jessica,and Samantha Form a Partnership How Much Income Must Samantha Recognize?
A)$0