Tim and Tom formed the equal T&T Partnership during the current year,with Tim contributing $200,000 in cash and Tom contributing land (basis of $100,000,fair market value of $140,000)and inventory (basis of $40,000,fair market value of $60,000).Tom recognizes a $60,000 gain on the contribution and his basis in his partnership interest is $200,000.

Question

Quizplus · Accepted Answer

Tom does not recognize a gain on the contribution of property to a partnership. His basis in the partnership interest is the sum of his basis in the contributed land and inventory, which is $140,000, not $200,000.

Tim and Tom Formed the Equal T&T Partnership During the Current