B. Questions and Problems fair market value of $15,000 and an adjusted basis of $10,000, in exchange for a 75% 1. A and B form Partnership AB that is not an LLP. A contributes property with a interest in AB. B contributes $5,000 for a 25% interest in AB. During the first year of operations, the following occurs: . Taxable income of $20,000 b. Charitable contributions of $1,000 3. Outside Basis and Allocation of Liabilities 96 C. AB borrows $10,000 on a recourse basis. d. Tax-exempt income of $2,000 e. Distributions of $30,000, $22,500 to A and $7,500 to B i. What are A's and B's bases for their partnership interests at the end of the year? rtnershin AB that is not an LLP. A contributes real