Asked by Madison Cudhea on May 10, 2024
Verified
If a personal-use asset is contributed to a partnership for business use,the partnership's basis in the asset is always the FMV of the asset.
Personal-Use Asset
An asset primarily used for personal enjoyment or living purposes, not for business or investment.
- Evaluate the repercussions of service and property contributions from partners on their ownership interest in the partnership and the recognition of income.
Verified Answer
CL
Carmz LasalaMay 13, 2024
Final Answer :
False
Explanation :
The partnership's basis in the contributed asset is generally the adjusted basis of the asset in the hands of the contributing partner at the time of contribution, not its fair market value (FMV), unless the partnership elects to adjust the basis of its assets under certain provisions of the Internal Revenue Code.
Learning Objectives
- Evaluate the repercussions of service and property contributions from partners on their ownership interest in the partnership and the recognition of income.
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