What is heather outside basis in the partnership

Reference no: EM133370179

Case Study: On March 15, 2019, Jennifer, Eliza, and Heather formed a cycling shop named SheSpoke Powell General Partnership. This partnership was created to sell a variety of bicycles and bicycle accessories. They also intend to service all makes and models of bikes. When it was formed, the partners received equal profits and capital interests, and the following items were contributed by each partner:

Jennifer--cash of $3,000, inventory with an FMV and tax basis of $5,000, and a building with an FMV of $22,000 and adjusted basis of $10,000. Additionally, the building was secured by a $10,000 nonrecourse mortgage.
Eliza-cash of $5,000, accounts payable of $12,000 (recourse debt for which each partner becomes equally responsible), and land with an FMV of $27,000 and tax basis of $20,000.
Heather-cash of $2,000, accounts receivable with an FMV and tax basis of $1,000, and equipment with an FMV of $40,000 and adjusted basis of $3,500. Heather also contributed a $23,000 nonrecourse note payable secured by the equipment.

Questions: Use the following format for all answers: $1,234 if gain; ($1,234) if loss; or, $0 if no gain or loss

What is Heather's outside basis in the partnership?
What amount of gain does Jennifer recognize associated with her contribution of the building?
How much gain will Eliza recognize associated with her contribution of the cash, accounts payable and land?
What is the partnership's inside basis of the building contributed by Jennifer?

Reference no: EM133370179

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