For a 30% interest in partnership capital, profits, and losses, Carol contributes a machine with a basis of $40,000 and an FMV of $80,000. The partnership assumes a $70,000 recourse liability on the machine. At the time of the contribution, the partnership had recourse liabilities of $10,000. Partners share the economic risk of loss from recourse liabilities in the same way they share partnership losses. Following the contribution, Carol has
A)a capital loss due to the contribution of $6,000 and a zero basis in the partnership interest.
B)a capital gain due to the contribution of $6,000 and a zero basis in the partnership interest.
C)a $34,000 basis in the partnership interest and no gain or loss.
D)a $43,000 basis in the partnership interest and no gain or loss.

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The Answer of For a 30% interest in partnership capital, profits, and losses, Carol contributes a machine with a basis of $40,000 and an FMV of $80,000. The partnership assumes a $70,000 recourse liability on the machine. At the time of the contribution, the partnership had recourse liabilities of $10,000. Partners share the economic risk of loss from recourse liabilities in the same way they share partnership losses. Following the contribution, Carol has
A)a capital loss due to the contribution of $6,000 and a zero basis in the partnership interest.
B)a capital gain due to the contribution of $6,000 and a zero basis in the partnership interest.
C)a $34,000 basis in the partnership interest and no gain or loss.
D)a $43,000 basis in the partnership interest and no gain or loss.

For a 30% Interest in Partnership Capital, Profits, and Losses