On January 1 of the current year, Sarah and Bart form an equal partnership. Sarah makes a cash contribution of $60,000 and a property contribution (adjusted basis of $160,000; fair market value of $140,000) in exchange for her interest in the partnership. Bart contributes property (adjusted basis of $120,000; fair market value of $200,000) in exchange for his partnership interest.
A. What is Sarah's basis for her partnership interest?
B. How much of Sarah's contribution to the partnership will be taxable
1. to the partnership?
2. to Sarah?
C. What is Bart's basis for his partnership interest?