Reference no: EM132704735

Sylvie has depreciable equipment she used in her sole proprietorship which she contributed to a partnership in exchange for a partnership interest. Sylvie purchased the equipment one year ago for $20,000 & its fair market value at time of contribution was $24,000. During the year she used the equipment in her sole proprietorship, Sylvie used straight-line depreciation with a 5 year life.

Problem 1: Which of the following statements is FALSE?

A. The partnership basis for calculating depreciation for the partnership is $20,000.
B. The partnership basis for determining gain on the asset if it were sold the day after it was contributed b Sylvie was $16,000.
C. The partnership may make a Section 179 election on the new acquisition of this equipment.
D. The partnership's depreciation method for this asset is straight line, and there recovery period would be five years.
E. The partnership would start in year 2 of the sole proprietorship depreciation schedule