Allison and Taylor Form a Partnership by Each Making Contributions

question 56

Essay

Allison and Taylor form a partnership by each making contributions of $90,000 cash to partnership capital. The partnership purchases an asset for $600,000, using the cash and financing the rest with a $420,000 recourse note. The partners expect the partnership to have losses for the first three years of operations and profits thereafter. Allison is allocated 75% of partnership losses until the date when the total partnership profits exceed total partnership losses. After that date, the profits and losses are shared equally between the two partners. How will the recourse debt be shared between the partners for basis purposes immediately after the property is acquired?

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Definitions:

Heteronormativity

A concept that describes the societal norm that assumes heterosexuality as the default or normal sexual orientation, often marginalizing non-heterosexual relationships and identities.

Heterosexuality

A romantic or sexual inclination towards people of a different sex.

Pansexuality

A sexual orientation characterized by the potential for attraction to individuals regardless of their gender or gender identity.

Asexuality

An orientation involving a lack of sexual attraction to others, or low or absent interest in or desire for sexual activity.