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Greg and Justin are forming the GJ Partnership. Greg contributes $500,000 cash and Justin contributes...

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Accounting

Greg and Justin are forming the GJ Partnership. Greg contributes $500,000 cash and

Justin contributes nondepreciable property with an adjusted basis of $200,000 and a fair

market value of $550,000. The Property is subject to a $50,000 liability, which is also

transferred into the partnership and is shared equally by the partners for basis purposes

Greg and Justin share in all partnership profits equally except for any precontribution

gain, which must be allocated according to the statutory rules for built-in gain allocations

-What is Justin's adjusted basis for his partnership interest immediately after

the partnership is formed?

-What is the partnership's adjusted basis for the property contributed by Justin'?

If d e partnership sells the property contributed by Justin for $600,000, how is the

tax gain allocated between the partners?

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