[cpaswag]

answer was 0 but I need help with steps as to how :
Strom acquired a 25% interest in Ace Partnership by contributing land having an adjusted basis of $16,000 and a fair market value of $50,000. The land was subject to a $24,000 mortgage, which was assumed by Ace. No other liabilities existed at the time of the contribution. What was Stroms basis in Ace?

[Lentilcounter]

Storm's initial basis in Ace = $16K or the adjusted basis of the land contributed

The partnership's assumed 75% of the liability on the land = .75*$24=$18K

$16K-$18K = -$2K, partner's basis cannot be below $0 which is Storm's basis after accounting for the liabilities assumed.

Storm will recognize a $2K capital gain.

BEC = 72 (6/08/16)
FAR = ?
REG = ?
AUD = ?

[Author]

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