Posted: December 19th, 2016
partnership of which C is the sole general partner. They agree to share profits and losses as follows:
Losses: 40% to each of A and B and 20% to C
Profits: 40% to each of A and B and 20% to C to the extent of previous losses; thereafter,
30% to each of A and B and 40% to C
The partnership agreement provides for the proper maintenance of capital accounts and for liquidating
distributions to be bade in accordance with the capital accounts, and all partners agree to an unlimited
deficit-restoration obligation. Immediately following its formation and before any profits or losses are
incurred, Partnership ABC borrows ,000 on a recourse basis to finance the acquisition of a small
industrial building. What is the initial outside basis of each of the partners?
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