Computing Gain on Contribution of Encumbered Property

This template can be used to determine how much gain, if any, must be recognized on a contribution of encumbered property to a partnership and to determine the partner’s adjusted tax basis in the partnership interest.

Entering Information

All of the information needed to produce the computation is entered on the Input worksheet.  The yellow highlighted cells are calculated fields, and no data should be entered in these cells.  Gray cells are not calculated fields, but data should not be entered in these cells.

Enter the following information:

  • Partner’s name
  • Partner’s tax year end
  • Dollar amount of liabilities assumed by the partnership
  • Contributor’s share of transferred liabilities
  • Tax basis of property contributed by the partner
  • Contributor’s pre-contribution basis in partnership
  • Partnership’s pre-contribution liabilities (Enter the partnership’s pre-contribution liabilities only if contributor will share in these liabilities after the contribution.)
  • Contributor’s share of partnership’s pre-contribution liabilities