Essay
Payton and Eli form the EP Partnership to provide marketing services. They will be equal partners. Payton is contributing property with a fair market value of $350,000 and a basis of $300,000. Eli is contributing property with a fair market value of $200,000 and a $175,000 basis. He will also provide services to the partnership valued at $150,000. Discuss the issues raised by this arrangement and the likely tax treatment of these issues.
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