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The taxpayer, T, contributed property with a value of $65,000 and a basis of $18,000 to a partnership in exchange for a 50% partnership interest.
The taxpayer, T, contributed property with a value of $65,000 and a basis of $18,000 to a partnership in exchange for a 50% partnership interest. The other partner contributed no capital. Shortly after formation, the partnership borrowed $870,000 and, as contemplated, distributed $65,000 to T. How would this transaction be treated under the current regulations?
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