Martha transferred property with a FMV of $60,000 (adjusted basis $30,000),which is subject to a $40,000 mortgage in exchange for a one-third interest in a partnership.The partnership has no other liabilities.The partners of MNO own the partnership equally.The partnership's basis in the property contributed is
A)$0.
B)$40,000.
C)$30,000.
D)$60,000.

Question

Quizplus · Accepted Answer

The partnership's basis in the contributed property is equal to the adjusted basis of the property to the contributing partner at the time of the contribution, which in this case is $30,000. The mortgage on the property is not taken into consideration when determining the partnership's basis.

Martha Transferred Property with a FMV of $60,000 (Adjusted Basis