Assignment Choice #1: Partnership Basis
Liz and John formed the equal LJ Partnership on January 1 of thecurrent year.Liz contributed $80,000 of cash and land with a fair market valueof $90,000 and an adjusted basis of $75,000. John contributedequipment with a fair market value of $170,000 and an adjustedbasis of $20,000. John had previously used the equipment in hissole proprietorship.
How much gain or loss will Liz, John, and the partnershiprealize?
How much gain or loss will Liz, John, and the partnershiprecognize?
What bases will Liz and John take in their partnershipinterests?
What bases will LJ take in the assets it receives?
Are there any differences between inside and outside basis?Explain.
How will the partnership depreciate any assets it receives fromthe partners?
Requirements:
Clearly identify the requirements being addressed. Show allcalculations within the cells of an Excel spreadsheet. This meansthat you must use formulas and links so that your thought processcan be examined. Make good use of comments to convey your thoughtprocess as well. No hard coding of solutions is permitted. Submit asingle MS Excel file for grading.
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