Paul and Kyle form PK partnership. Paul contributes land worth $100,000 (575,000
ID: 2467708 • Letter: P
Question
Paul and Kyle form PK partnership. Paul contributes land worth $100,000 (575,000) in exchange for a 50% interest in PK. Kyle contributes $23,000 cash, his personal automobile worth $17,000 (basis of $32,000), and machinery worth 560,000 (basis of 537,000) in exchange for a 50% interest in PK. How much gain or loss do Paul, Kyle, and PK recognize from the transfer? What is Paul's basis in his partnership interest? What is Kyle's basis in his partnership interest? What is PK's basis in the assets it acquired on the transfer?Explanation / Answer
Ans:a Profit and Gain Account Particular Amount(In $) Particular Amount(In$) To Land 25000 By Cash 23000 To Machine 23000 By Automobile 15000 By loss Paul(50%) 5000 Kyle(50%) 5000 TOTAL 48000 TOTAL 48000 b)Paul's Basis in his partnership Interest 50% ie1/2 c) Kyle's Basis in his Partnership Interest 50% ie 1/2