McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 60

{Planning}Harry and Sally formed the Evergreen partnership by contributing the following assets in exchange for a 50 percent capital and profits interest in the partnership:
?a.How much gain or loss will Harry recognize on the contribution?
?b.How much gain or loss will Sally recognize on the contribution?
?c.How could the transaction be structured a different way to get a better result for Sally?
?d.What is Harry's tax basis in his partnership interest?
?e.What is Sally's tax basis in her partnership interest?
?f.What is Evergreen's tax basis in its assets?
?g.Following the format in Exhibit 20-2, prepare a tax basis balance sheet for the Evergreen partnership showing the tax capital accounts for the partners.