Question

Hakim contributed $30,000 of cash for a 40% interest in an architectural firm partnership. He also contributed piece of equipment with an adjusted basis of $10,000, FMV of $15,000, and an attached liability of $8,000. What is Hakim's basis in his partnership interest?

Answer 1

Hakim's basis in his partnership interest would be the sum of the cash contributed and his share of the adjusted basis of the contributed equipment. In this case, it would be $30,000 (cash) + (40% of $10,000) = $34,000.