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JLcpa Regular
Joined: 22 Sep 2009
Online Status: Offline Posts: 202
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Posted: 03 May 2011 at 05:58 | IP Logged
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This is confusing- Gleim & Becker are stating things differently & Gleim is contradicting itself in a couple of places!
1. When a partner contributes property in exchange for partnership interest & the property is subject to mortgage that the partnership assumes, how is the partner's gain calculated?
In the examples given by Gleim & Becker, it is:
Adj basis of property contributed (less) Mortgage assumed by other partners
However, in another Q, Gleim states that partner must recongnize gain to the extent the reduction in his personal liability exceeds the adj basis of prop contributed PLUS "his share of the new partnership liability"
2. Partner's basis in the p'ship
Per Gleim, this is:
Adj basis of property contributed
(plus) Gain recognized on contributed property
(plus) Partner's share of liability
(less) Partner's liability assumed by P'ship
Per Becker, it is:
Adj basis of property contributed
(less) Partner's liability assumed by P'ship
3. Thankfully, both Gleim & becker agree on Partnership's basis in the contributed property:
Contributed partner's adj basis in the property before contribution (plus) any gain recognized by the partner.
Could someone please clarify. Thanks!
__________________ Jas, Jersey City, NJ
AUD- 18 Nov 2009- 86
FAR- 28 Jan 2010- 91
BEC- 26 Feb 2010- 87
REG- May 2011- 78
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jl0329 Regular
Joined: 15 Feb 2011 Location: United States
Online Status: Offline Posts: 186
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Posted: 03 May 2011 at 09:35 | IP Logged
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Gain is only recognized when the liability assumed by
other partner's is greater than its basis.
For example,
NBV = $100, Mortgage = $300, 50% interest in P.
gains recognized $50. (150 - 100). Partner's basis = 0
example #2,
NBV = $100, Mortgage = $100, 50% interest in P.
No gains recognized. Partner's basis in partnership is
$50.
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JLcpa Regular
Joined: 22 Sep 2009
Online Status: Offline Posts: 202
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Posted: 04 May 2011 at 04:45 | IP Logged
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Thanks jl0329. Could you also confirm what you have for calculation of partnership basis?
__________________ Jas, Jersey City, NJ
AUD- 18 Nov 2009- 86
FAR- 28 Jan 2010- 91
BEC- 26 Feb 2010- 87
REG- May 2011- 78
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jl0329 Regular
Joined: 15 Feb 2011 Location: United States
Online Status: Offline Posts: 186
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Posted: 04 May 2011 at 09:32 | IP Logged
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Partnership's basis is just the carry over basis (NBV).
So if a property has a NBV of $100, partnership's basis in
it is $100.
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