[trk85718]

Can someone explain to me why a partner who contributes property subject to a liability is only impacted by the liability assumed by the other partners. I guess the assumed liabilities are considered contributed capital for the other partners but why not the partner who actually contributed the property subject to the liability?

Example : 300,000 Building with an ADJ of $100,000 basis subject to a 90,000 liability is contributed. Contributor gets 1/3 partnership

Contributing partner basis : 100,000 – 60,000 (liab assumed by other partners)

Why does the remaining 30,000 not increase the contributing partners basis?

[Bourne]

It does. You can look at it like this to make more sense:

100,000 basis – 90,000 liability given up + 30,000 (which is the contributor's share of the liability (90,000*.333333333))

[Andyred04]

Think of basis as just another word for risk. So obviously each partner is “at risk” for the amount of their contribution (because if the business goes under, they're out whatever they put in). Likewise, if the business were to go under the partners are still liable to pay back that mortgage (or whatever the liability is on the building). However, since the liability is now the partnership's (which is 33% owned by each partner), each partner would be liable for $30k, hence “at risk” for $30k each. Hope this makes sense!

FAR: 80 (Gleim, Ninja Notes, Ninja MCQs)
REG: 87 (Gleim, Ninja Notes, Ninja MCQs)
BEC: 87 (Gleim, Ninja Notes, Ninja MCQs)
AUD: 8/27/16

PA Candidate

[Skynet]

When guys get married, the assume the wife's credit liabilities whether they like it or not.😬

[Author]

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