Daniel and Emma form HP Enterprises, LLC a partnership designed to market and sell Harry Potter merchandise. In exchange for equal partnership interests (capital, profits and losses) Daniel and Emma contribute the following:

Daniel: AB FMV

Cash $25,000 $25,000

Property $25,000 $45,000

Debt associated with the property $20,000 $20,000

Emma contributed cash of $50,000.

A. What is Daniel's initial basis in the partnership interest?

B. What is Emma's initial basis in the partnership interest?

C. What basis does the partnership take in the assets?