Question

during the current year, norman contributed property held more than 1 year to the maryann partnership for a 40% interest. the total capital after his contribution was $50,000. his tax basis in the property was $8,000, and it had a fair market value of $10,000 at the time of the contribution to the partnership. what gain or loss should norman report on the contribution of his property to the partnership?

Answer 1

No gain or loss would be reported on the contribution of the property that is in this partnership.

Why would no gain or loss be reported?

No gain or loss is recognized by a partnership or its partners upon the contribution of any property to the partnership in exchange for an interest in it, in accordance with Section 721(a). It follows a standardized method.

By definition, a partnership business consists of two or more individuals who pool their resources to create a company and agree to split the risks, rewards, and losses. Law firms, medical groups, real estate investment firms, and accountancy groups are typical instances of partnership businesses.

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