Harry and Sally formed the Evergreen partnership by contributing the following assets in exchange for a 50 percent capital and profits interest in the partnership: Basis Fair Market Value Harry: Cash $ 30,000 $ 30,000 Land 100,000 120,000 Totals $ 130,000 $ 150,000 Sally: Equipment used in a business 200,000 150,000 Totals $ 200,000 $ 150,000 What is Evergreen’s tax basis in its assets
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
13a.Harry and Sally formed the Evergreen partnership by contributing the following assets in exchange for a 50 percent capital and profits interest in the partnership:
|
|
Basis |
Fair Market Value |
|
Harry: |
|
|
|
Cash |
$ 30,000 |
$ 30,000 |
|
Land |
100,000 |
120,000 |
|
Totals |
$ 130,000 |
$ 150,000 |
|
Sally: |
|
|
|
Equipment used in a business |
200,000 |
150,000 |
|
Totals |
$ 200,000 |
$ 150,000 |
What is Evergreen’s tax basis in its assets?
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