Jamie decides to contribute cash and property to a partnership she and her friends started.She contributes a building worth $260,000 that has an adjusted basis of $100,000 and she also contributes $40,000 in cash.What is her basis in the partnership?

Question

Quizplus · Accepted Answer

Jamie's basis in the partnership is the total adjusted basis of all the assets she contributed. The adjusted basis of the building is $100,000, and since it was contributed to the partnership, its basis carries over to the partnership. The cash contribution of $40,000 is also a part of Jamie's basis in the partnership.

Therefore, Jamie's total basis in the partnership is $100,000 (adjusted basis of building) + $40,000 (cash contribution) = $140,000. Hence, option B is correct.

Jamie Decides to Contribute Cash and Property to a Partnership