How much gain or income will joan recognize on contribution

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Joan and Bob are equal partners in the JB Partnership formed on August 1 of the current year. Bob contributed land that he inherited from his father three years ago (purchased in 1950 for 6,000) The land was work 50,000 when his father died (FMV of 75,000 when given to partnership). Joan has significant real estate experience she will do all related work usually billing 25,000 to a third party. She will also contribute $50,000 of cash in exchange for 50% interest in the partnership. The value of her 50% is 75,000.

1. How much gain or income will Bob recognize on his contribution of the land to the partnership? What is the character of any gain or income recognized?

2. What basis will bob take in his partnership interest?

3. How much gain or income will Joan recognize on his contribution of the land to the partnership? What is the character of any gain or income recognized?

4. What basis will Joan take in her partnership interest?

5. Construct an opening balance sheet for the partnership reflecting the partnerships basis in assets and the fair market value of these assets.

Reference no: EM13144784

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