Harry and sally formed the evergreen partnership by, Ask an Expert

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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. Basis Fair Market Value Harry: Cash $30,000 $30,000 Land $100,000 $120,000 Totals $130,000 $150,000 Sally: Equipment used in business $200,000 $150,000 Totals $200,000 $150,000

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. Should Sally consider selling the property to the partnership rather than contributing it?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9987785

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