Reference no: EM133115768
Question - Rachael, Joey, and Ross form an partnership (FRIENDS partnership). They contributed the following assets: equal
Rachael contributes Land (FMV = $2,000; basis = $3,000); Equipment (FMV = $2,000; basis = $4,000); inventory (FMV = $2,000, basis = $500). Rachael has held the equipment for two years and the land for 8 months.
Joey contributes cash of $1,000; Blackacre (FMV = $3,000; basis = $10,000); and Blueacre (FMV = $2,000; basis = $500). Joey has held the properties for 2 years prior to contribution.
Ross contributes cash of $2,000 and Whiteacre (FMV = $4,000; basis = $5,000). Ross held Blackacre for 8 months prior to contribution.
Required -
a. Construct an opening balance sheet for the FRIENDS partnership.
b. Calculate the partners' "outside bases".
c. What is the partners holding period for their partnership interests?
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