Mr. A, Mr. B, and Mr. C formed a calendar-year partnership. Profits and losses a

Question

Mr. A, Mr. B, and Mr. C formed a calendar-year partnership. Profits and losses are to be shared equally. Mr. A contributed a building to be used in the business that had an adjusted basis to him of $10,000 and a fair market value of $13,000. The partnership also assumed Mr. A’s $6,000 mortgage on the building. Mr. B and Mr. C each contributed $4,000 in cash to the partnership’s capital. What is the partnership’s basis for determining depreciation on the building?

A. $13,000 B. $4,000 C. $10,000 D. $0

Explanation / Answer

Wheneve a new parters join or any new partnership is formed than the assets carrying by the parters are valued on the basis of assets take in the partnetship.

So, in the given cash there is Building's assets basis is $ 10,000

Answer = Option C = $ 10,00

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