Joseph contributed $25,750 in cash and equipment with a tax basis of $14,800 and a fair market value of $19,500 to Berry Hill Partnership in exchange for a partnership interest. a. What is Joseph's tax basis in his partnership interest? b. What is Berry Hill's basis in the equipment?

Question

Larry Frank

Business

16 March, 08:45

Joseph contributed $25,750 in cash and equipment with a tax basis of $14,800 and a fair market value of $19,500 to Berry Hill Partnership in exchange for a partnership interest. a. What is Joseph's tax basis in his partnership interest? b. What is Berry Hill's basis in the equipment?

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Answers (1)

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Rachel Hood · Answer 1

a. Joseph's tax basis in his partnership interest=$40,550

b. Joseph contributed equipment with a tax basis of $14,800, therefore, Berry Hill's basis in the equipment is $14,800

Explanation:

a. In order to calculate Joseph's tax basis in his partnership interest we would have to make the following calculation:

Joseph's tax basis in his partnership interest=amount contributed in cash+tax basis equipment

According to given dа ta:

amount contributed in cash=$25,750

equipment tax basis = $14,800

Therefore, Joseph's tax basis in his partnership interest=$25,750+$14,800

Joseph's tax basis in his partnership interest=$40,550

Joseph's tax basis in his partnership interest is $40,550

b. According to the given data Joseph contributed equipment with a tax basis of $14,800, therefore, Berry Hill's basis in the equipment is $14,800