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Ali, a construction contractor builds an office building for construction partnership in exchange for a partnership interest in capital and profits. Ali's normal fee for
Ali, a construction contractor builds an office building for construction partnership in exchange for a partnership interest in capital and profits. Ali's normal fee for his services is $400,000. Based on the appraised value of the office building, the fair market value of Ali's partnership interest is estimated at $500,000. What is Ali's outside basis in his partnership interest upon the completion of his construction services?
A. $400,000
B. $500,000
C. $0
D. None of the above
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