Gerald Received a One-Third Capital and Profit (Loss)interest in XYZ

question 75

Multiple Choice

Gerald received a one-third capital and profit (loss) interest in XYZ Limited Partnership (LP) . In exchange for this interest, Gerald contributed a building with an FMV of $27,000. His adjusted basis in the building was $13,500. In addition, the building was encumbered with a $8,100 nonrecourse mortgage that XYZ LP assumed at the time the property was contributed. What is Gerald's outside basis immediately after his contribution?

• A)$5,400
• B)$8,100
• C)$18,900
• D)$21,600

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