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Contribution of services. Sean is admitted to the calendar year XYZ Partnership on December 1...

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Accounting

Contribution of services. Sean is admitted to the calendar year XYZ Partnership on December 1 of the current year in return for his services managing the partnership's business during the year. The partnership reports ordinary income of $100,000 for the current year without considering this transaction. Assume a nonleap year.

What are the tax consequences to Sean and the calendar year XYZ Partnership if Sean receives a 20% capital and profits interest in the partnership with a $75,000 FMV?

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