Andy & Bob are 50/50 partners in ABCO. Andy died January 28, 2016 and leaves his partnership interest to his wife Ellen. The business is renting apartments. The basis of the real estate is $ 89,455. The Fair Market Value of these properties is $ 1,244,807 and the mortgages due on them is $ 662,669. Ellen sells her 50% interest to Bob on June 6 for $ 200,000 cash and relief from all debts. What is Ellen's basis on January 28, 2016? Do you adjust Ellen's basis on January 28, 2016 to $ 200,000 plus 50% of the debt since that is the price for which she sold it to Bob? What is Bob's basis for future depreciation of that 50% interest? Do you use that basis from Ellen (above) as Bob's stepped up basis for his future depreciation for that 50% interest?

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