Suzy contributed assets valued at $360,000 (basis of $200,000) in exchange for her 40% interest in Suz-Anna GP (a general partnership). Anna contributed land and a building valued at $640,000 (basis of $380,000) in exchange for the remaining 60% interest. Anna's property was encumbered by a qualified nonrecourse debt of $100,000, which was assumed by the partnership. The partnership reports the following income and expenses for the current tax year: Sales $560,000 Utilities, salaries, and other operating expenses 360,000 Short-term capital gain 10,000 Tax-exempt interest income 4,000 Charitable contributions 8,000 Distribution to Suzy 10,000 Distribution to Anna 20,000 During the current tax year, Suz-Anna refinanced the land and building (i.e., the original $100,000 debt was repaid and replaced with new debt). At the end of the year, Suz-Anna had recourse debt of $100,000 for partnership accounts payable and qualified nonrecourse debt of $200,000. a. Suzy's beginning basis in her partnership interest is $ 240,000 , and Anna's basis is $ 340,000 . Feedback A partner's adjusted basis is affected by the partner's share of partnership debt. Partnership debt includes any partnership obligation that creates an asset; results in an expense to the partnership; or results in a nondeductible, noncapitalizable item at the partnership level. This definition includes certain contingent liabilities. The definition also includes most debt that is considered a liability under financial accounting rules except for accounts payable of a cash basis partnership. b. Enter the amounts and line number for the following items that will appear on Suzy's Schedule K-1. Item Amount Line on Sch. K-1 Ordinary income $ 80,000 1 Short-term capital gain $ 4,000 8 Tax-exempt interest income $ 1,600 18 Charitable contributions $ 3,200 13 Distribution received by Suzy $ 10,000 19 Feedback Correct c. Assume all partnership debts are shared proportionately. Suzy's year-end basis in her partnership interest is $______, and Suzy's amount at risk is $ ______