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6 April, 11:54

Bernard and Leon formed a partnership on January 1 with cash contributions of $600,000 and $200,000, respectively. The partners agree to share profits and losses in the ratio of their initial capital contributions. The partnership immediately borrowed $800,000. What is Bernard's tax basis in his partnership interest

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  1. 6 April, 12:23
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    Bernard's tax basis in his partnership interest is $1,200,000

    Explanation:

    According to the given data, we have the following information:

    cash contributions=$600,000 and $200,000 respectively

    partnership borrowed=$800,000

    Therefore, in order to know what What is Bernard's tax basis in his partnership interest we have to make the following calculation:

    =$600,000 + ($800,000*75%)

    =$1,200,000

    Bernard's tax basis in his partnership interest is $1,200,000
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