Problem
Sue and Andrew form SA general partnership. Each person receives an equal interest in the newly created partnership. Sue contributes$10,000of cash and land with an FMV of$55,000. Her basis in the land is$20,000. Andrew contributes equipment with an FMV of$12,000and a building with an FMV of$33,000. His basis in the equipment is$8,000, and his basis in the building is$20,000.
i. How much gain must Sue recognize?
ii. How much gain must Andrew recognize?