Exercise 10-26 (Algorithmic) (LO. 10) Jokan contributes a nondepreciable asset to the Mahall LLC in exchange for a one-fourth (25%) interest in the LLC's capital and profits and a 30% Interest in the LLC's losses. The asset has an adjusted tax basis to Jokan and the LLC of $75,000 and a fair market value and $704(b) "book" basis on the contribution date of $135,000. The asset is encumbered by a nonrecourse note of $45,000 that has not been guaranteed by any of the LLC members. How much of the nonrecourse debt is allocated to Jokan? 48,750 X What is the amount of Jokan's basis in the LLC interest following the contribution? $ 18,750 X. Feedback Check My Work Partnership debt is allocated based on whether it is recourse, nonrecourse, or qualified nonrecourse financing. Recourse debt is partnership debt for which the partnership or at least one of the partners is personally liable. This personal liability can exist, for example, through the operation of state law or through personal guarantees that a partner makes to the creditor. Nonrecourse debt is debt for which no partner is personally liable. Lenders of nonrecourse debt generally require that collateral be pledged against the loan. Upon default, the lender can claim only the collateral, not the partners' personal assets. Qualified nonrecourse financing is a subset of nonrecourse debt that applies for purposes of the at-risk limitation