Question

DT and HC are equal partners. DT is the general partner and HC is the limited partner. On January 1, 20xx, each had an adjusted basis in the Politics Partnership of $325,000. During 20xx, the partnership borrowed $40,000 on a recourse basis. In 20xx, the partnership had an operating loss of $675,000. What is the basis of each partner's interest at the end of 20xx? What is the loss for each partner?

Answer 1

1.)	Basis of each partner interest at end of 20xx:-
	Adjusted basis on January 1,20xx	325,000
	Add: Share of Recourse liability	20,000	(40,000 / 2 )
	Basis of each partner interest at end of 20xx	345,000
2.)	Loss for each partner	337,500	(675,000 / 2 )