Question: A and B form the equal AB partnership. A contributes property (FMV = $100,000, basis = $60,000) and B contributes $100,000 cash. The property is depreciated straight line over a 10 year life for both book and tax purposes. Using the traditional method under Code Sec. 704(c), how much of the tax depreciation in the first year will A get?
- How much will B be allocated?
- How much of the gain would be allocated to A if the asset is sold for $110,000 at the beginning of year 2?