Greg and Justin are forming the GJ Partnership. Greg contributes $500,000 cash and Justin contributes nondepreciable property with an adjusted basis of $200,000 and a fair market value of $550,000. The property is subject to a $50,000 liability, which is also transferred into the partnership and is shared equally by the partners for basis purposes. Greg and Justin share in all partnership profits equally except for any precontribution gain, which must be allocated according to the statutory rules for built-in gain allocations.
a. What is Justin's adjusted tax basis for his partnership interest immediately after the partnership is formed?
b. What is the partnership's adjusted basis for the property contributed by Justin?
c. If the partnership sells the property contributed by Justin for $600,000, how is the tax gain allocated between the partners?