In the Current Year, Derek Formed an Equal Partnership with Cody

question 111

Essay

In the current year, Derek formed an equal partnership with Cody. Derek contributed land with an adjusted basis of
$110,000 and a fair market value of $200,000. Derek also contributed $50,000 cash to the partnership. Cody contributed land with an adjusted basis of $80,000 and a fair market value of $230,000. The land contributed by Derek was encumbered by a $60,000 nonrecourse debt. The land contributed by Cody was encumbered by $40,000 of nonrecourse debt. Assume that the partners share debt equally. Immediately after the formation, what is the basis of Cody's partnership interest?

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Definitions:

Abducens

Refers to the abducens nerve (cranial nerve VI) that controls the lateral rectus muscle of the eye, responsible for abducting or moving the eye laterally.

Oculomotor

Pertaining to the third cranial nerve, which controls most of the eye's movements, the constriction of the pupil, and maintenance of eyelid elevation.

Trochlear

Refers to the fourth cranial nerve that controls the superior oblique muscle of the eye, aiding in rotational movement.

Facial

Relating to the face, or to the facial nerve which controls muscles of expression, taste sensation, and more.