Jokan contributes a non-depreciable asset to the Mahali LLC in exchange for a one-fourth (25%) interest in the capital, profits and losses of the LLC. The asset has an adjusted tax basis to Jokan and the LLC of $60,000 and a fair market value and 704(b) book basis on the contribution date of $150,000. The asset is encumbered by a nonrecourse note of $80,000 that has not been guaranteed by any of the LLC members.

a. Under 704(c) principles, how much of the nonrecourse debt is allocated to Jokan and what is the amount of Jokans basis in the LLC interest following the contribution?