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Fei and Wei formed the FW Ltd. general partnership. Fei contributed a building and land...

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Accounting

Fei and Wei formed the FW Ltd. general partnership. Fei contributed a building and land with a
FMV of $130,000(building $100,000 and land $30,000), nonrecourse debt of $60,000, and a tax
basis of $75,000(building $60,000 and land $15,000). Wei contributed cash of $30,000 for his
30% share of the partnership.
The building has 10 years remaining in its class life. The book depreciation is $10,000 per year
and the tax depreciation is $6,000 per year.
Calculate each partner's book and tax depreciation using the traditional method found in
Regulation $1.704-3(b) for 2022.
a. Fei Book depreciation $7,000 and Tax depreciation $4,200; Wei Book depreciation $3,000 and
Tax depreciation $1,800
b. Fei Book depreciation $7,000 and Tax depreciation $3,000; Wei Book depreciation $3,000 and
Tax depreciation $3,000
c. Fei Book depreciation $7,000 and Tax depreciation $6,000; Wei Book depreciation $3,000 and
Tax depreciation $0
d. none of the above
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