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In the current year, Ashley formed an equal partnership with Reede. Ashley contributed land with an adjusted basis of $200,000 and a fair market value of $300,000. Ashley also contributed $100,000 cash to the partnership. Reede contributed land with an adjusted basis of $120,000 and a fair market value of $360,000. The land contributed by Ashley was encumbered by a $40,000 nonrecourse debt. Assume the partners share debt equally. Immediately after the formation, the basis of Ashley's partnership interest is:

$280,000.
$360,000.
$380,000.
$400,000.
None of the above

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9439845

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