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Falcon buys a 35% interest in Carrot Partnership for $1,000 on January 1. During Year 1, Carrot Pshp incurs $10,000 of debt and a $5,000
Falcon buys a 35% interest in Carrot Partnership for $1,000 on January 1. During Year 1, Carrot Pshp incurs $10,000 of debt and a $5,000 loss. In Year 2, Carrot Pshp pays down $5,000 of debt and has a loss of $10,000.
What is Falcon's basis in Year 1?
What is Falcon's basis in Year 2?
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