I copied the information straight out of the IRS publication 541 below.
@tiredofcoffee
The basis of a partnership interest is the money
plus the adjusted basis of any property the partner
contributed. If the partner must recognize
gain as a result of the contribution, this gain is
included in the basis of his or her interest. Any
increase in a partner's individual liabilities because
of an assumption of partnership liabilities
is considered a contribution of money to the
partnership by the partner.
I think the gain in your question based on the paragraph above is different. When the partnership assumes liabilities from the partner in the property transferred greater than the adjusted basis of the property, the partner's interest basis goes to $0 and anything above that becomes a capital gain to the partner. However, this capital gain is not included in the partner's basis to increase it. See the examples below.
What is the gain above referring to that increases the partner's basis as a result of a contribution? I'm still trying to figure that out.
Example 1. Ivan acquired a 20% interest in
a partnership by contributing property that had
an adjusted basis to him of $8,000 and a
$4,000 mortgage. The partnership assumed
payment of the mortgage. The basis of Ivan's
interest is:
Adjusted basis of contributed property……
$8,000
Minus: Part of mortgage assumed by other partners (80% × $4,000)
3,200
Basis of Ivan's partnership interest……..
$4,800
Example 2. If, in Example 1, the contributed property had a $12,000 mortgage, the basis of Ivan's partnership interest would be zero. The $1,600 difference between the mortgage assumed by the other partners, $9,600 (80% × $12,000), and his basis of $8,000 would be treated as capital gain from the sale or exchange of a partnership interest. However, this gain wouldn't increase the basis of his partnership interest.
BEC = 72 (6/08/16)
FAR = ?
REG = ?
AUD = ?
.