Adam and Barbara Formed a Partnership to Construct an Apartment

question 89

Essay

Adam and Barbara formed a partnership to construct an apartment building.Adam contributed $500,000 cash and Barbara contributed land ($500,000 FMV and $250,000 basis)in exchange for a 50 percent interest in AB Partnership.Immediately after its formation,the partnership borrowed $600,000 from a local bank to begin construction.Compute each partner's initial basis in their partnership interest,assuming that:
a.Adam and Barbara are both general partners.
b.Adam is a limited partner and Barbara is a general partner.

---

Definitions:

Preparedness

The concept that certain associations are learned more readily than others due to evolutionary predispositions.

Food Aversion

A strong dislike or disinclination towards a specific food, often resulting from a negative past experience such as illness.

Behavior Modification

A therapeutic approach designed to change specific undesirable behaviors using reinforcement principles.

Classical Conditioning

The method of instruction where a response is learned by associating a stimulus from the environment with one that occurs naturally.