R and J form an LLC. They agree to share profits and losses equally. R transfers cash of $500 and J transfers cash of $500. The partnership then acquires a parcel of land for $5,000, using the $1,000 total cash contributed by the partners and by obtaining a $4,000 loan that both R and J personally guarantee.

- What is each partner’s share of the recourse liability?

- What is each partner’s outside basis after the partnership incurs the liability?

Assuming the same facts, except R and J agree to share profits 50%/50% and losses 70%/30%. Answer the following:

- What is each partner’s share of the recourse liability?

- What is each partner’s outside basis after the partnership incurs the liability?

Assuming the same facts as above (i.e., same profit/loss sharing ratios) except that the liability is a non-recourse liability, answet the following in detail:

- What is each partner’s share of the non-recourse liability?

- What is each partner’s outside basis after the partnership incurs the liability?

Answer rating: 100% (QA)

What is each partners share of the recourse liability 2000 Each partner is liable for half of the loan or 2000 Recourse liability is when a creditor has the right to go after the personal assets of a ... View the full answer