Kuda exchanges property with a FMV of $630,000 and an adjusted basis of $450,000 in exchange for a one- third interest in a partnership. The property is subject to a mortgage with a principal balance of $300,000 which the partnership assumes. As a result of Kuda joining the partnership, Alejandro, a pre- existing partner, now has a one- third interest in the partnership. Alejandro will adjust his basis to

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Alejandro's basis will increase by $100,000 because he assumes one-third of the $300,000 mortgage liability, which is $100,000.

Kuda Exchanges Property with a FMV of $630,000 and an Adjusted