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Jack, Sarah and Dave establish CLEAN as a general partnership at the beginning of the current year. Jack contributes $60,000 in cash and equipment with a fair market value of $90,000 (basis of $60,000), and receives 40% ownership. Sarah contributes a building with a fair market value of $150,000 (basis of $70,000), and receives 40% ownership. This building was subject to a non-recourse loan of $40,000, which CLEAN assumes. Dave contributes his legal and accounting services in running a business with a liquidation value of $40,000. Dave receives a capital interest for his service and a profit interest, 20% ownership. During the year, CLEAN received dividend income of $6,000, and made cash distributions of $80,000 (in total) to the partners. It sold the equipment for $110,000. CLEAN also reports the following for the year: gross income of $200,000, operating expenses of $300,000 including a guaranteed payment of $50,000 to Dave. Assuming all the partners actively participate in CLEAN, what is each partner's (1) initial outside basis in CLEAN at the formation and (2) adjusted outside basis in CLEAN at the end of the year? If any partner has any income or carryforward consequences, you must mention it. Make sure to show ALL of your work. quipment contribution FMV basis initial basis transferred basis Capital interest allocation of Cl deduction none-recourse debt relief allocation of non-recourse debt initial outside basis Jack Sarah Dave cash equipment building services 60000 90000 150000 60000 60000 70000 40% 40% 20% built-in gain 30000 120000 70000 40000 40000 -40000 -20000 -20000 - 40000 -40000 40000 16000 16000 8000 116000 26000 48000 2400 2400 60000 50000 1200 50000 operations dividends guaranteed payment sale of the equipment realized amt tax basis realized gain built-in gain remaining gain cash distribution tax basis before business loss at-risk amt 110000 60000 50000 30000 20000 -80000 30000 8000 -32000 124400 108400 8000 -32000 4400 0 4000 - 16000 87200 79200 Business loss -100000 - 40000 -40000 -20000 84400 67200 adj outside tax basis carryover loss 4400 -40000 Jack, Sarah and Dave establish CLEAN as a general partnership at the beginning of the current year. Jack contributes $60,000 in cash and equipment with a fair market value of $90,000 (basis of $60,000), and receives 40% ownership. Sarah contributes a building with a fair market value of $150,000 (basis of $70,000), and receives 40% ownership. This building was subject to a non-recourse loan of $40,000, which CLEAN assumes. Dave contributes his legal and accounting services in running a business with a liquidation value of $40,000. Dave receives a capital interest for his service and a profit interest, 20% ownership. During the year, CLEAN received dividend income of $6,000, and made cash distributions of $80,000 (in total) to the partners. It sold the equipment for $110,000. CLEAN also reports the following for the year: gross income of $200,000, operating expenses of $300,000 including a guaranteed payment of $50,000 to Dave. Assuming all the partners actively participate in CLEAN, what is each partner's (1) initial outside basis in CLEAN at the formation and (2) adjusted outside basis in CLEAN at the end of the year? If any partner has any income or carryforward consequences, you must mention it. Make sure to show ALL of your work. quipment contribution FMV basis initial basis transferred basis Capital interest allocation of Cl deduction none-recourse debt relief allocation of non-recourse debt initial outside basis Jack Sarah Dave cash equipment building services 60000 90000 150000 60000 60000 70000 40% 40% 20% built-in gain 30000 120000 70000 40000 40000 -40000 -20000 -20000 - 40000 -40000 40000 16000 16000 8000 116000 26000 48000 2400 2400 60000 50000 1200 50000 operations dividends guaranteed payment sale of the equipment realized amt tax basis realized gain built-in gain remaining gain cash distribution tax basis before business loss at-risk amt 110000 60000 50000 30000 20000 -80000 30000 8000 -32000 124400 108400 8000 -32000 4400 0 4000 - 16000 87200 79200 Business loss -100000 - 40000 -40000 -20000 84400 67200 adj outside tax basis carryover loss 4400 -40000