At the beginning of the current year, Cari and Dan formed the CD Partnership byFalcon buys a $40\%$ general partnership interest in Carrot Partnership for $$2,500$ on

January $1.$ During Year $1,$ Carrot Pshp incurs $$5,000$ of debt and a $$6,000$ loss. In Year

$2,$ Carrot Pshp pays off all of the debt and incurs a loss of $$2,000.$

What is Falcon's basis in Year $1?$

What is Falcon's basis in Year $2?$

transferring cash and property to the partnership in exchange for a partnership interest,

with each having a $50\%$ interest. Specifically, Cari transferred property having a $$100,000$

FMV$,$ a $$26,000$ adjusted basis, and subject to a $$10,000$ liability, which the partnership

assumed. Dan contributed $$50,000$ cash to the partnership.

What is Carl's beginning basis in the partnership at the time of contribution?

$$26,000$

$$21,000$

$$95,000$

$$11,000$