Question

Daniel acquires a 30% interest in the ppz partnership from paolo, an existing partner for $39,000 of cash. the ppz partnership includes $10,000 of recourse liabilities. what is daniel's basis in his partnership interest?

Answer 1

Daniel has a 30% interest in the ppz partnership from paolo and has $39,000 cash but the ppz has also $10,000 of resource liability. So, Daniel basis in his partnership interest is $42,000

Daniel has outside basis of $3,000 ( .30 * $10,000) share of the partnership from their resource liability. So $3,000 + $39,000 = $42,000