On October 1, 20X6, Michael contributes a patent and Jane contributes $200,000 cash to start Awesome Inventions, LLC. Michael and Jane each receive a 50% partnership interest. The patent has a fair ma

On October 1, 20X6, Michael contributes a patent and Jane contributes $200,000 cash to start Awesome Inventions, LLC. Michael and Jane each receive a 50% partnership interest. The patent has a fair market value of $200,000, and Michael’s adjusted basis in the patent is $4,000.

What amount of gain must Michael recognize on the formation of the partnership?

$

What amount of gain must Jane recognize on the formation of the partnership?

$

What is Michael’s beginning outside basis in his partnership interest?

$

What is Jane’s beginning outside basis in her partnership interest?

$

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