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:

Older Brothers

Male siblings who are older, often referenced in studies examining birth order and its psychological or social effects.

Sexual Identity

An individual's conception of themselves in relation to their sexual orientation, preferences, and partners.

Adolescents

Individuals in the transitional stage of physical and psychological development that occurs between childhood and adulthood.

Sexual Stirrings

The beginning or first signs of sexual desire and awareness, often occurring during puberty.