1. On January 1 of 2023, Guilletta adn Rhine form an equal partnership with a cash contribution of $40,000 from Guilletta and a property contribution (adjusted Basis of $75,000 and Fair Market Value of $50,000) from Rhine. Rhine acquired the property two (2) years ago. Which of the following statemenet is not correct?
   1. The partnership takes basis of $50,000 in the property contributed by Rhine.
   2. Guilletta has $40,000 initial basis in her partnership interest.
   3. The partnership has no recognized gain or loss.
   4. Rhine has a $75,000 initial basis in her partnership interest.
2. Marie and Ella are equal partners in the calendar year Partnership of M&E. On January 1, 2023, each partners basis in their Partnership interest in the Partnership was $40,000. During the year of 2023, the partnership borrowed $60,000 for which MArie and Ella are both personally liable. The partnership sustained an Operating loss of $10,000 for the year of 2023. The basis of each partner's interest in the partnership at the end of the tax year of 2023 is:
   1. $35,000
   2. $40,000
   3. $65,000
   4. $70,000
3. The Inside Basis of a Buying Partner is the amount paid plus the Selling Partner's share of Liabilities (debts) of the Partnership.
   1. True
   2. False