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Miguel and Ann formed a partnership. Miguel received a 40% interest in partnership capital and profits in exchange for land with a basis of $100,000 and a fair market value of $140,000. Ann received a 60% interest in partnership capital and profits in exchange for $210,000 of cash. Three years after the contribution date, the land contributed by Miguel is sold by the partnership to a third party for $160,000. How much taxable gain will Miguel recognize from the sale?

Respuesta :

Answer:

Taxable gain on land that Miguel will recognize from  the sales of land = $20,000

Explanation:

the fair market of Land will used in determining the value of the land at the time Miguel is receiving the land from the partnership. therefore the cost of the land to Miguel is $140,000 rather than $100,000

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