Bryan,Shahin,and Michele form a partnership.Bryan and Shahin contribute inventory and a building,respectively.Michele agrees to perform all of the accounting and office work in exchange for a 10% interest. F M V Basis Partnership % Bryan’s inventory $ 300 , 000 $ 225 , 000 45 % Shahin’s building $ 300 , 000 $ 125 , 000 45 % Michele’s services $ 0 $ 0 10 % \begin{array}{llll} & FMV & ext { Basis } & ext { Partnership }\%\ ext { Bryan ' s inventory } & \$ 300,000 & \$ 225,000 & 45\% \ ext { Shahin ' s building } & \$ 300,000 & \$ 125,000 & 45\% \ ext { Michele ' s services } & \$ 0 & \$0 & 10\%\end{array} Bryan’s inventory Shahin’s building Michele’s services FM V $300 , 000 $300 , 000 $0 Basis $225 , 000 $125 , 000 $0 Partnership % 45% 45% 10% a.Do any of the partners recognize any gain? If so,how much and why?b.What is each partner's basis in his or her partnership interest?c.What is the basis to the partnership of each asset?

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Bryan,Shahin,and Michele form a partnership.Bryan and Shahin contribute inventory and a building,respectively.Michele agrees to perform all of the accounting and office work in exchange for a 10% interest. F M V  Basis   Partnership  %  Bryan’s inventory  $ 300 , 000 $ 225 , 000 45 %  Shahin’s building  $ 300 , 000 $ 125 , 000 45 %  Michele’s services  $ 0 $ 0 10 % \begin{array}{llll} & FMV & 	ext { Basis } & 	ext { Partnership }\%\	ext { Bryan ' s inventory }  &  \$ 300,000  &  \$ 225,000 & 45\% \	ext { Shahin ' s building }  &  \$ 300,000  &  \$ 125,000 & 45\% \	ext { Michele ' s services }  &  \$  0  &  \$0 & 10\%\end{array}  Bryan’s inventory   Shahin’s building   Michele’s services  ​ FM V $300 , 000 $300 , 000 $0 ​  Basis  $225 , 000 $125 , 000 $0 ​  Partnership  % 45% 45% 10% ​   a.Do any of the partners recognize any gain? If so,how much and why?b.What is each partner's basis in his or her partnership interest?c.What is the basis to the partnership of each asset?

Shahbaz Khoso · Accepted Answer

Final Answer :  a.Michele will recognize $60,000 as a guaranteed payment.She receives a capital interest in exchange for services ($600,000 FMV × 10% interest).b.    Bryan’s partnership basis  $ 225 , 000  Shahin’s partnership basis  $ 125 , 000  Michele’s partnership basis  $ 60 , 000 \begin{array}{lr}	ext { Bryan ' s partnership basis }  &  \$ 225,000 \	ext { Shahin ' s partnership basis }  &  \$ 125,000 \	ext { Michele ' s partnership basis }  &  \$ 60,000\end{array}  Bryan’s partnership basis   Shahin’s partnership basis   Michele’s partnership basis  ​ $225 , 000 $125 , 000 $60 , 000 ​ c.    Inventory  $ 225 , 000  Building  $ 125 , 000 \begin{array}{ll}	ext { Inventory } & \$225,000\	ext { Building } & \$125,000\end{array}  Inventory   Building  ​ $225 , 000 $125 , 000 ​

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