Adam and Barbara formed a partnership to construct an apartment building. Adam contributed $500,000 cash and Barbara contributed land ($500,000 FMV and $250,000 basis) in exchange for a 50 percent interest in AB Partnership. Immediately after its formation, the partnership borrowed $600,000 from a local bank to begin construction. Compute each partner's basis in their partnership interest, assuming that:
Adam and Barbara are both general partners.Adam is a limited partner and Barbara is a general partner.

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The Answer of Adam and Barbara formed a partnership to construct an apartment building. Adam contributed $500,000 cash and Barbara contributed land ($500,000 FMV and $250,000 basis) in exchange for a 50 percent interest in AB Partnership. Immediately after its formation, the partnership borrowed $600,000 from a local bank to begin construction. Compute each partner's basis in their partnership interest, assuming that:
Adam and Barbara are both general partners.Adam is a limited partner and Barbara is a general partner.

Adam and Barbara Formed a Partnership to Construct an Apartment