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C and D are equal partners in the CD partnership. (a) C starts the year with an adjusted basis of $200 in the partnership while

C and D are equal partners in the CD partnership. (a) C starts the year with an adjusted basis of $200 in the partnership while D starts the year with an adjusted basis of $1,500. The partnership incurs a loss of $1,000 for the year. What consequences to the parties? (b) Continuing the facts of (a), in the subsequent year, CD earns a profit of $300.

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