When property is contributed to a partnership for a capital and profits interest, the holding period of the contributing partner's interest:
A)Always starts the day after the contribution date.
B)Always starts the day the property was contributed.
C)May include the holding period of the contributed property.
D)Never includes the holding period of the contributed property.
E)None of the above.

Question

Quizplus · Accepted Answer

The holding period of the contributed property may be included in the holding period of the partner's interest depending on whether the property is a capital asset or not. If the property is a capital asset, then the partner's holding period includes the holding period of the property. However, if the property is not a capital asset, then the partner's holding period starts on the day after the contribution.

When Property Is Contributed to a Partnership for a Capital