Question - Drew and Emma formed the equal D&E Partnership on January 1 of the current year. Drew contributed $50,000 of cash and land with a fair market value of $100,000 and an adjusted basis of $80,000. Emma contributed equipment with a fair market value of $150,000 and an adjusted basis of $60,000. Emma had previously used the equipment in her sole proprietorship.
a. How much gain or loss will Drew, Emma, and the partnership realize?
b. How much gain or loss will Drew, Emma, and the partnership recognize?
c. What bases will Drew and Emma take in their partnership interests?
d. What bases will D&E take in the assets it receives?
e. Are there any differences between inside and outside basis?
f. How will the partnership depreciate any assets it receives from the partners?