Question: When a partner contributes encumbered property and the indebtedness is assumed by the partnership: a . both the contributing partner's basis in the partnership interest

When a partner contributes encumbered property and the indebtedness is assumed by the partnership:

.

both

the contributing partner's basis in the partnership interest is reduced by the amount of

the net amount of indebtedness assumed by the other partners.

and

the noncontributing partners' bases in their partnership interests increase by their respective amounts of partnership debt for which they are responsible.

.

None of the options

.

the contributing partner's basis in the partnership interest is reduced by the amount of the net amount of indebtedness assumed by the other partners.

.

the noncontributing partners' bases in their partnership interests increase by their respective amounts of partnership debt for which they are responsible.

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