In return for a 10% interest in the Sapphire Partnership, Lily transfers cash of $50,000 and land (basis of $200,000; fair market value of $300,000). Lily's basis in her Sapphire Partnership interest is $250,000.

Question

Quizplus · Accepted Answer

Lily's basis in the partnership interest is the sum of the cash contributed ($50,000) and the basis of the land contributed ($200,000), totaling $250,000.

In Return for a 10% Interest in the Sapphire Partnership