What is Reagan's basis after this transaction?
Chapter20: Corporations And Partnerships
Section: Chapter Questions
Problem 33CE
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Transcribed Image Text:Liam & Reagan Company is a partnership that has two partners, Liam and Reagan. At the beginning of the year,
Liam's basis in the partnership is $40,000 while Reagan's basis is $70,000. During the year, Liam transfers a
building to the partnership. The building has an adjusted basis to Liam of $350,000 and a fair market value of
$450,000. There is a recourse mortgage attached to the building of $250,000 that the partnership assumes.
Liam's profit-sharing ratio is 40% and his loss sharing ratio is 30%. Reagan's profit-sharing ratio is 60% and her
loss sharing ratio is 70%. What is Reagan's basis after this transaction?
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