Question ID : 1361

INTRODUCTION OF PARTNER"S CAPITAL IN FIRM

A partner a firm had purchased a plot of nd his dividual capacity before the partnership deed was executed. The Firm then agreed (oral agreement) to undertake division of the Plot to sub-plots and sale therefater on as is where is condition or after development (as per requirements of ers).

The plot of nd has been shown as capital troduced (by way of stock trade) by the partner the books of the firm at agreement value.

It is proposed to have a tripatriate agreement between the owner of the plot (i.e. the patner), the developer (i.e. the firm) and the ers of the sub-plot to effect the transfer of right property.

Now the quions arisg are:

(1) With regard to the capital contribution by the partner, what would be the capital Gas implication the hands of the firm, if the cost of the plot is taken the books of the firm as the value of capital troduced? Whether it is appropriate to show such capital as stock Hand?

(2) Would there be any other tax implication (whether to the firm or partner)?
'

Post Your Answer

Please login to post your answer.