Jim Braun has been a partner in a real estate investment partnership with Alicia Kaynes for 10 years.When the real estate market took a downward turn,one of their investments in a strip mall became a cash drain.Jim refused to contribute any more cash and withdrew from the partnership.Alicia was left to manage the property.Before she could sell it,Alicia had put in $125,000 into the strip mall property.Following the sale,Alicia demanded one-half of the $125,000 from Jim.Jim said he is not liable because he left the partnership.
A)Jim is correct; he withdrew and his liability ended.
B)Alicia is correct; Jim owes her his share of what she paid.
C)Neither is correct; how much Jim owes depends on when he withdrew.
D)none of the above

Question

Quizplus · Accepted Answer

Even though Jim withdrew from the partnership, he is still responsible for his share of the expenses incurred up until the point of his withdrawal. Alicia put in $125,000 into the strip mall property after Jim's withdrawal, but that does not absolve Jim of his responsibility to pay for his share of the initial investment. Therefore, Alicia is correct and Jim owes her his share of the $125,000.

Jim Braun Has Been a Partner in a Real Estate