Pete contributes land (basis of $80,000; fair market value of $300,000)for a 25% interest in a partnership.The land is subject to a mortgage of $40,000 which the partnership assumes.As a result of the transfer,Pete:

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Pete's basis in the partnership is calculated as his original basis in the land ($80,000) minus the mortgage assumed by the partnership ($40,000), resulting in a basis of $50,000.

Pete Contributes Land (Basis of $80,000; Fair Market Value of $300,000)for