Lacy contributes the following assets to a partnership for a 25% interest: The land and the van have a basis to the partnership of:

Question

Lacy contributes the following assets to a partnership for a 25% interest:  The land and the van have a basis to the partnership of:

Quizplus · Accepted Answer

To calculate the basis of the assets contributed by Lacy, we need to use the concept of "contribution basis," which is the greater of the asset's adjusted basis or the fair market value at the time of contribution. 
- Land: Lacy contributed the land with a fair market value of $15,000. The contribution basis would be the adjusted basis since it is lower than the fair market value. We don't know what Lacy's adjusted basis is, so we cannot determine it. However, we know that the contribution basis cannot exceed the fair market value, so we can safely say that the partnership's basis in the land is $15,000.
- Van: Lacy contributed the van with a fair market value of $10,000. The contribution basis would be $10,000 because it is the greater of the adjusted basis or the fair market value. Therefore, the partnership's basis in the van is $10,000. 
Thus, the correct answer is C.

Lacy Contributes the Following Assets to a Partnership for a 25