The Walden Partnership has two 20 percent general partners and six 10 percent limited partners.During the current year,the partnership paid off $50,000 of notes payable,purchased machinery for $100,000 on a nonrecourse note,borrowed $20,000 for working capital,and had $80,000 income from operations.

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B  A) Each general partner's basis is increased by their share of income and decreased by their share of liabilities paid off. Income allocation: 20% of $80,000 = $16,000. Liabilities paid off: 20% of $50,000 = $10,000. New basis: $30,000 + $16,000 - $10,000 = $36,000.  B) The limited partner's basis is increased by their share of income and decreased by their share of liabilities paid off. Income allocation: 10% of $80,000 = $8,000. Liabilities paid off: 10% of $50,000 = $5,000. New basis: $10,000 + $8,000 - $5,000 = $13,000.

The Walden Partnership Has Two 20 Percent General Partners and Six