Ernst and Young form the equal EY partnership. Ernst contri…
Ernst and Young form the equal EY partnership. Ernst contributes property (FMV = $150,000, basis = $60,000) and Young contributes $150,000 cash. The property is depreciated straight line over a 10 year life for both book and tax purposes. The partnership also has other property (FMV = $100,000, basis = $100,000) that is depreciated straight line over 5 years. Under Code Sec. 704(c), how much of the tax depreciation of the contributed property in the first year will Young get? Assuming a curative allocation is made, how much will it be?