In: Accounting
hunter and prey form the take it all partnership. hunter contribute a rifle with a fmv 15,000 and an adjusted basis of 8,000 for a 30 percent interest in the partnership. prey performs services for the 70 percent partnership interest which is value at 10,000. how much gainis recognized by hunter, how much gain from prey, and what is the classification of preys income?
Hey there !!
Therefore, in the present case, Hunter has contributed an asset valued at $15,000 to the partnership, with a basis to you of $8,000 in exchange for a 30% partnership interest, Partnership will have no gain on the contribution. The basis in the interest Hunter receives and partnership’s basis in the Asset are both $15,000.
Same is the case with Partner Prey. The income will be classified as Ordinary income itself.
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