question 25

K and L formed a partnership to construct a restaurant. K contributed $501,000 cash, and contributed land ($501,000 FMV and $431,000 basis) in exchange for a 50 percent interest in Big Partnership. Immediately after its formation, Big Partnership borrowed $250,500 from a local bank. The debt is recourse (unsecured by any specific partnership asset). Compute K's initial basis in its partnership interest, assuming that is a general partner, and Lis a limited partner