Steve, Karen, David and Ellen form a limited partnership with each contributing $10,000 in cash. Steve, serves as general partner and is obligated to restore any partnership deficit under state law. Karen, David and Ellen are limited partners and have no obligation to restore any deficits in their capital accounts other than to the extent required to satisfy the qualified income offset provision of their partnership agreement.

The partnership borrows $960,000 on a recourse basis and uses $1,000,000 of cash to buy a building.

What is Karen's outside basis in her partnership interest?

Answer rating: 100% (QA)

Solution In Partnership there are 2 basis 1 inside basis 2 outside bas... View the full answer