On July 1, 2016, Clark acquired a 20 percent interest in the D and D...
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Accounting
On July 1, 2016, Clark acquired a 20 percent interest in the D and D Partnership, by contributing a parcel of land for which his basis was $8,000. After the contribution, each of the other two partners owned a 40 percent interest in the D and D Partnership. Upon contribution, the land had a fair market value of $20,000 and was subject to a mortgage of $4,000. Responsibility for the mortgage was assumed by the partnership. What, if any, effect did Clarks contribution have on the basis of the partnership interests owned by the other two partners?
a. none.
b. the other partners bases in their partnership interests were decreased.
c. the other partners bases in their partnership interests were increased.
d. The answer depends on the character of the property in the hands of the partnership.
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