Question: Greg and Hal formed an equal general partnership. Greg contributed $5,000 and Hal contributed land with a tax basis of $7,000 and subjec to a

Greg and Hal formed an equal general partnership. Greg contributed $5,000 and Hal contributed land with a tax basis of $7,000 and subjec to a $2,000 recourse liability. The partnership assumes the debt. The partnership agreement provides that, upon liquidation, all partners must restore a negative capital account.

A. Determine how the $2,000 debt should be allocated between Greg and Hal.

B. Determine Greg and Hal's outside basis in the partnership.

C. Prepare a balance sheet to reflect the situation of the partnership immediately after formation.

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