OK here is an addendum to my post. A bit of an explanation of why I am confused about this topic that should not be that difficult. Been looking around the web trying to figure this out. I get contradicting opinions when doing so.
Using the same variables as the post: Cost basis C, FMV, gain G which is just FMC-C.
Here is a link that discusses inside/outside basis:
Partnership Distributions, Inside and Outside Basis (thismatter.com)
Little yellow box near top and paragraph above it.
- This description tells me that the FMV should be used to increase the partner capital account.
- But I asked a CPA about this and was told to use the basis C, not FMV as the partner contribution value an increase the cap account by C.
Here is another link someone posted in another thread:
https://www.smithlaw.com/media/alert/108_wrogers.pdf
Bottom of the first page, "Background" says partner receives credit for FMV of contributed property. This fits with the first link, above and many others I look at.
But if you go to the next page, last sentence before the "Liquidating vs...." section, it basically says that the outside basis C is credited to the partners capital account, not FMV.
This fits more with the advice I got from the CPA...
Etc. etc.,
