What is T basis in his partnership interest

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Q1. At the beginning of the current year, Corporation M had a $50,000 basis in its 50% interest in the M&N Partnership. For the year, M&N incurred a $168,000 net operating loss and received $20,000 of dividend income. M's share of the partnership's debts decreased by $6,000 the year. The partnership made no distributions to its partners. Based on these facts, what amount of M&N's net operating loss may M recognize during the current year?

-$44,000 ordinary loss

-$50,000 ordinary loss

-$64,000 ordinary loss

-$70,000 ordinary loss

Q2. T transfers a building ($90,000 market value, $40,000 basis), plus a $60,000 recourse debt on the building, to a partnership in exchange for a 30% capital interest valued at $30,000. What is T's basis in his partnership interest if the partnership has no other debt?

-$0

-$2,000

-$12,000

-$30,000

-$40,000

Reference no: EM132962688

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