What are the tax consequences to a partner who contributes liabilities that exceed the total basis of

Question:

What are the tax consequences to a partner who contributes liabilities that exceed the total basis of assets transferred to a new partnership in exchange for a partnership interest? How does your answer change if the same assets and liabilities are instead transferred to form a new C corporation?

Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...

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