Given

Katrina purchases an interest in the GA partnership on January 1 of the current year for $50,000. The parthnership uses the calender year as its tax year, and has $200,000 in recourse liabilities when Katrina acquires her interest. The partners share economic risk of loss associated with recourse debt according to their loss percentage. Her distributive share of the parthnership items for the year is as follows:

Ordinary income (excluding items listed below) $30,000

Long-term capital gains $10,000

Municipal bond interest income $8,000

Charitable contribuitions $1,000

Interest expense related to municipal bond investment $2,000

GA reports the following liabilities on December 31:

Recourse debt $100,000

Non-recourse debt ( not qualified real estate financing) $80,000

a) what is Katrina's basis on December 31 if she has 40% interest in profits and losses? GA is a general partnership. Tina has not guaranteed partnership debt, nor has she made any other special arrangements about partnership debt. (Show how you arrived at your answer.)

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b) How would your answer to part a change if Katrina were instead a limited having 40% interest in profits, and 30% interest in losses? The partnership agreement contains no guarantees or other special arrangements.(show how you arriaved to the answer)

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