Rex adjusted basis in partnership interest


Rex contributed land to the partnership of Rex, Tex, and Lex Partnership in exchange for a one-third interest in the Partnership. Rex's adjusted basis in the land was $50,000 and its fair market value was $75,000. Rex's Partnership capital account was credited with $75,000. Tex and Lex had each contributed $75,000 cash. Thus, each partner's capital account was $75,000. What is Rex's adjusted basis (outside basis) in his partnership interest?

a. $75,000

b. $50,000

c. $37,500

d. cannot be determined from the facts stated

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Accounting Basics: Rex adjusted basis in partnership interest
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