Daniel and Emma form HP Enterprises, LLC a partnership designed to market and sell Harry Potter merchandise. In exchange for equal partnership interests (capital, profits and losses) Daniel and Emma contribute the following:

Daniel: AB FMV

Cash $25,000 $25,000

Property $25,000 $45,000

Debt associated with the property $20,000 $20,000

Emma contributed cash of $50,000.

A. What is Daniel's initial basis in the partnership interest? (5 points)

B. What is Emma's initial basis in the partnership interest? (5 points)

C. What basis does the partnership take in the assets? (5 points)