Jones and Smith formed a partnership with each partner contributing the following items:
Assume that for tax purposes Jones and Smith agree to share equally in the liabilities assumed by the Jones and Smith partnership.

-Refer to the above information.What is each partner's tax basis in the Jones and Smith partnership?

Question

Jones and Smith formed a partnership with each partner contributing the following items:
Assume that for tax purposes Jones and Smith agree to share equally in the liabilities assumed by the Jones and Smith partnership.
 
-Refer to the above information.What is each partner's tax basis in the Jones and Smith partnership?

Quizplus · Accepted Answer

Jones' tax basis is $10,000 ($5,000 cash + $5,000 property). Smith's tax basis is $15,000 ($10,000 cash + $5,000 property).

Jones and Smith Formed a Partnership with Each Partner Contributing