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Problem 1: XYZ is a limited partnership. Josie is the general partner and has a 60?% interest in partnership capital and profits. Eva is the limited partner and has a 40?% interest in capitaland profits. XYZ borrows? $100,000 on a recourse basis. What is the impact of? XYZ's borrowing on the tax basis each partner has in their partnership interests??
A. Neither partners basis changes as a result of the borrowing.
B. Josie's basis increases by? $60,000 ;? Eva's basis increases by? $40,000
C. ?Josie's basis increases by? $100,000 ;? Eva's basis is unchanged.
D. ?Josie's basis increases by? $60,000; Eva's basis is unchanged
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