Partners recognition when picture perfect was formed

Reference no: EM13143589

On march 15, 2010, Troy, Peter, and Sarah formed picture perfect general partenership. this partneship was created to sell a variety of cameras, picture frames and other photography accessories. When it was formed, the partners received equal profits and capital interest and the following items were contributed by each partner:

1. Troy-cash of 3,000, inventory with a FMV and tax basis of 5,000, amd a building with a 10,000 mortgage that was assumed by the partnership.

2. Peter-cash of 5,000, accounts payable of 12,000(assumed by parntership), and land with a FMV of 27,000 and tax basis of 20,000

3. Sarah- cash of 2,000, accounts receivable with a FMV and tax basis of 1,000, and equipment with a FMV of 40,000 and adjusted basis of 3,500. Saral also contributed a 23,000 note payable, and the partnership assumed legally responsiblity for paying the note.

What is each partners beginning putside basis and how much gain(loss) must the partners recognize in 2010 when Picture Perfect was formed?

Reference no: EM13143589

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