On January 4, 2011, Smith and White contributed

$4,000 and $6,000 in cash, respectively, and formed the Macro General Partnership. The partnership agreement allocated profits and losses 40% to Smith and 60% to White.

In 2011, Macro purchased property from an unrelated seller for $10,000 cash and a $40,000 mortgage note that was the general liability of the partnership. Macro’s liability

a. Increases Smith’s partnership basis by $16,000.

b. Increases Smith’s partnership basis by $20,000.

c. Increases Smith’s partnership basis by $24,000.

d. Has no effect on Smith’s partnership basis.