Question 3 a.$40,000 Franklin and Jane decide to form their new bakery business as a partnership. Each will receive an equal capital and profits interest by contributing cash, property or both. In addition, their partnership will obtain a $50,000 nonrecourse loan from Fayetteville Bank at the time it is formed. Jane contributes a building which has a basis of $30,000 and a FMV of $45,000. The building is secured by a $35,000 nonrecourse mortgage that the partnership will assume. What is Jane's outside basis in her partnership interest? b. $45.000 c. $37.500 0 points d. $42,500 Saved

the correct answer for the question is c. $37,500. why is this the correct answer? thanks

Frankh and Jane declde to fom thelr new bakery business as a partnership. Each will recewe an equal caplial and profits intecest by contributing cash, propecty or both. In addition, thek partnership will obtain a 550,000 nenrecourse loan from Fayettevile Bank at the time it is formed. Jabe contributes a bulding waich has a basis of $30,000 and a FMV of $45,000 The buliding is secured by a $35,000 nonrecourse inotge pe frat the partnership will assume. What is Jane 5 outside basis in hor partnorship interest? a. 540,000 b. $45000 c. $37500 d. $42500