Question - Consider three people with three different partnership interests, and determine each individual's basis for partnership interest in the following three independent situations. In each situation, the individual shares the economic risk of loss from recourse liabilities according to his or her partnership interests. Analyze the tax implications for each scenario in the following case study. Apply the IRS codes to determine the outside basis of ownership in partnership interests. Support your conclusions with reference to specific IRS codes and regulations.

1. Joanie receives her 20% partnership interest for a contribution of property having a $14,000 basis and a $17,000 fair market value (FMV). The partnership assumes her $10,000 recourse liability but has no other debts.

2. Henry receives his 20% partnership interest as a gift from a friend. The friend's basis (without considering partnership liabilities) is $34,000. The FMV of the interest at the time of the gift is $36,000. The partnership has liabilities of $100,000 when Henry receives his interest. No gift tax was paid with respect to the transfer.

3. Laura inherits her 20% interest from her mother. Her mother's basis was $140,000. The FMV of the interest is $120,000 on the date of death and $160,000 on the alternate valuation date. The partnership has no liabilities. When valuing the estate, should the executor choose the date of death or the alternate valuation date? Why?