6. Loretta contributes property to a partnership in exchange for a 25% partnersh

Question

6. Loretta contributes property to a partnership in exchange for a 25% partnership interest. The property contributed has a fair market value of $45,000 and a basis of $35,000 on the date of the contribution to the partnership. In addition, Loretta receives a 10% partnership interest, valued at $18,000, in exchange for services rendered to the partnership. What is Lorettas basis in her partnership interest, immediately after these transactions? A. $53,000 B. $35,000 C. $63,000 D. $45,000 E. None of these choices are correct 6. Loretta contributes property to a partnership in exchange for a 25% partnership interest. The property contributed has a fair market value of $45,000 and a basis of $35,000 on the date of the contribution to the partnership. In addition, Loretta receives a 10% partnership interest, valued at $18,000, in exchange for services rendered to the partnership. What is Lorettas basis in her partnership interest, immediately after these transactions? A. $53,000 B. $35,000 C. $63,000 D. $45,000 E. None of these choices are correct A. $53,000 B. $35,000 C. $63,000 D. $45,000 E. None of these choices are correct

Explanation / Answer

The option A. $53,000 is correct.

Explanation:

Loretta basis in her partnership interest, immediately after these transactions = Basis of property contributed + Value of interest received from partnership.

Loretta basis in her partnership interest, immediately after these transactions = $35,000 + $18,000 = $53,000

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