Problem
Jim and Becky contribute property to form the JB partnership. Jim contributes cash of $30,000. Becky contributes land with an adjusted basis and fair market value of $45,000, subject to a liability of $15,000. The partnership assumed the liability and borrowed $50,000 to finance construction of a building on the contributed land. At the end of the first year, the accrual basis partnership owes $3,500 in accounts payables to various vendors. Jim and Becky share equally in liabilities.
a. What is Jim's basis in his partnership interest considering only the above transactions?
b. What is Becky's basis in her partnership interest considering only the above transactions?