If a personal-use asset is contributed to a partnership for business use,the partnership's basis in the asset is always the FMV of the asset.

Question

Quizplus · Accepted Answer

The partnership's basis in the contributed asset is generally the adjusted basis of the asset in the hands of the contributing partner at the time of contribution, not its fair market value (FMV), unless the partnership elects to adjust the basis of its assets under certain provisions of the Internal Revenue Code.

If a Personal-Use Asset Is Contributed to a Partnership for Business