oakhillsal
Level 3
12-07-2019
05:42 AM
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A partnership was dissolved by one partner buying out the other. The remaining party continues the business as as sole proprietorship. All the hard assets stayed with the business. The selling partners share was 49% and he invested $19,600. The buying partner paid the selling partner $10,000 for his part of the business. Does the $10,000 constitute an asset that can be depreciated or amortized?
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sjrcpa
Level 15
12-07-2019
05:42 AM
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Your client bought 49% of all the assets of the partnership. Each asset on the balance sheet has a FMV. The assets get stepped up to FMV (49%). If anything is depreciable it now has a higher basis. §754
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