Nina and Sue form an equal partnership during the current year.Nina contributes cash of $100,000,and Sue contributes property (adjusted basis of $40,000,fair market value of $250,000)subject to a nonrecourse liability of $150,000.As a result of these transactions,Sue has a recognized gain of $35,000 and a basis in her partnership interest of $75,000.

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Typically,no gain or loss is recognized when a partner contributes property subject to nonrecourse debt to a partnership.Sue is allocated the first $110,000 of debt ($150,000 debt - $40,000 basis),plus one-half of the remaining debt.She has an adjusted basis for her partnership interest of $20,000,calculated as follows: 11ea7f05_2e85_8e37_92e1_433794c9293a_TB4123_00

Nina and Sue Form an Equal Partnership During the Current