Daniel acquires a 30% interest in the PPZ Partnership from Paolo, an existing partner for$39,000 of cash. The PPZ Partnership has borrowed $10,000 of recourse liabilities as of the date Daniel bought the interest. What is Daniel's basis in his partnership interest?

Question

Quizplus · Accepted Answer

Daniel's basis in his partnership interest is determined as follows:

Purchase price: $39,000
Share of recourse liabilities (30% x $10,000): $3,000

Total basis: $42,000

Daniel Acquires a 30% Interest in the PPZ Partnership from Paolo